Prices rose by 0.1 per cent in the year to October, the Central Statistics office said today, reflecting falling mortgage rates and energy prices.

The rise was attributed to a 5.3 per cent increase in the cost of alcohol and tobacco over the year, with a rise of 4.6 per cent in education due to increased costs for third level education, and 1.8 per cent in the cost of restaurants and hotels, which was attributed to higher costs for alcohol consumed on licensed premises.

This was partly offset by a fall in the price of clothing and footwear, which declined by 4.1 per cent due to cut-price sales, and a 2.2 per cent decline in the cost of transport and petrol and diesel prices fell.

However, the inflation figures do not take account of the increased excise duty on alcohol and tobacco imposed in the budget last month, meaning further rises are likely to be reflected in next month’s release.

“The underlying narrative around the CPI remains intact - muted inflationary pressures are continuing to provide a degree of respite for Irish consumers,” Investec said.

On a monthly basis, consumer prices fell by 0.2 per cent compared with December, as transport fell by 2.2 per cent and the price of restaurants and hotels fell 0.4 per cent. However, education rose by 4.4 per cent in the month.

Prices measured by the HICP, which does not include items such as mortgage interest, fell by 0.1 per cent year on year. (Reuters)