Consumer prices increased by 0.9 per cent in February bringing the annual rate of inflation to 5.3 per cent, figures from the Central Statistics Office show today.
The most significant increases over the month were in clothes and footwear up 9.2 per cent, alcoholic drink up 1.5 per cent and housing up 1.4 per cent.
The main factors behind the monthly change were the recovery in clothing prices after the January sales and increases in the retail price of alcohol.
The cost of housing rose by 26.2 per cent over the year while the price of alcoholic drink rose by 4.9 per cent over the same period.
Mr Dan McLaughlin, chief economist at Bank of Ireland Treasury, welcomed the figures, predicting that February represented the inflationary peak for this year.
"I think CPI will fall from here on. Over the next couple of months the strong rises in energy prices and chunky mortgage rate hikes we saw last year will drop out of the equation, so we'll see positive base effects kicking in," he said.
He forecast average 2001 inflation at slightly below four per cent. The European Union harmonised index of consumer prices (HICP), which is used for intra-EU comparison, was up 0.9 per cent from a month earlier and up 3.9 per cent from the same month the previous year.
According to latest euro zone data, Portugal and the Netherlands at 4.9 percent, and Spain at 4.0 percent, are now ahead of Ireland in HICP terms. Late last year Irish inflation was running at nearly three times the euro zone average.
Mr Austin Hughes, economist at IIB Bank in Dublin, acknowledged the headline figure was better than expected but was less sanguine about the details of the index.
He said the February figure was probably close to the year's peak but he was less confident of that given the risks from rising food costs. The food component rose 0.8 per cent on the month for an annual increase of 5.5 per cent, with the foot-and-mouth crisis expected to impact on March's figures.