Inflation falls to 2.3% as service prices slow

The annual rate of inflation fell sharply in October to 2

The annual rate of inflation fell sharply in October to 2.3 per cent as consumers benefited from cheaper clothes and energy prices and a significant moderation in the price of services.

The overall Consumer Price Index (CPI), decreased by 0.1 per cent in October compared to an increase of 0.5 per cent in October of last year and, as a result, the annual rate of inflation fell to 2.3 per cent, down from 2.9 per cent in September.

A breakdown of the index reveals that the annual rate of inflation for services is now running at 3.3 per cent compared to a rate of 1.2 per cent in respect of goods.

Inflation in the services sector was at one stage running at double-digit pace pushing Irish inflation to twice the European average.

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The most notable changes in the year were increases in alcohol and cigarettes (+ 9.8 per cent), health (+ 6.9 per cent) and education (+6.9 per cent).

Decreases were recorded for clothing and footwear (-3.4 per cent) and the cost of fuel and electricity (-3.2 per cent).