The annual rate of inflation edged down last month to 2.5 per cent, according to the Central Statistics Office (CSO). The figures show that inflation in the services sector remains well above that for goods.

Prices increased by a moderate 0.1 per cent during the month, down from 0.2 per cent in the same month last year, with the most significant monthly increases in clothing and footwear, as prices rose following the end of summer sales.

Home heating oil prices also rose, but it will be in future months that the more recent increase in crude oil prices feed through into consumer prices.

The annual inflation rate eased from 2.6 per cent in August to 2.5 per cent last month. The annual inflation rate for goods was just 1.4 per cent, while that for services was 3.6 per cent.

Over the past year, housing and energy prices have risen by 6.6 per cent, education prices by 6 per cent and health costs by 5.4 per cent. One of the most significant increases is the 4.5 per cent rise in restaurants and hotels - to which a 10 per cent rise in accommodation costs was a major contributor.

Hoteliers have argued that this overstates the price rise as the CSO does not take into account the discounts offered to many people booking accommodation.

In contrast, goods inflation remains moderate in many areas and prices have fallen in some others. Clothing and footwear prices, while they have rebounded from the summer sales lows, remain 2.8 per cent below the same month last year, while furnishings and household equipment is down 2.4 per cent annually. This reflects intense competition in the retail industry and probably also the impact of the strong euro on import costs in some areas.

The figures show that inflation here remains a bit above the EU average of 2.1 per cent and the euro-zone average of 2.5 per cent.