The annual rate of inflation fell to 3.9% in November, new figures from the Central Statistics Office show today.
This marks the first time since September 2021 that the annual rate has been less than 5%. The inflation rate had stood at 5.1% in October.
Energy prices were the biggest contributor to pushing inflation up and now the fall in energy prices has taken a sizeable chunk out of the headline rate of inflation.
Last month electricity prices fell by almost 10%, gas fell 13% and home heating oil slipped 5.4% making it 17% cheaper than a year ago.
But leaving energy aside, there is still a lot of price pressures lingering.
Food inflation remained above 6% on an annual basis with some food products like dairy coming down in price while other commodities like sugar and rice continue to rise.
Today’s figures show that mortgage interest repayments are up 37% compared to last year. When they are excluded, inflation last month was 2.8%.
Overall, goods inflation is 1.7% while services inflation, when mortgage interest repayments are excluded, is running at 3.8% on an annual basis.
The expected future course of inflation will be become clearer when the ECB President Christine Lagarde holds her regular press conference following the Governing Council’s decision on interest rates later today.
Falls in the price of oil on international markets has led to the prices of both petrol and diesel coming down last month, despite increases in the carbon tax. On an annual basis, petrol is down 0.9% while diesel is 10.5% cheaper than a year ago.
The price of flights and package holidays also fell last month but both are higher than a year ago, with the cost of package holidays are 32% higher than November 2022.
Prices in cafes and restaurants also rose and are just over 7% higher than a year ago, with similar price increases in bars. The price of hotels fell last month but are up 5.6% on an annual basis.
Other services continue to increase in price with hairdressing up on an annual basis by 7.7% while health insurance is up 10.2% and home insurance is up just over 11%.