Inflation rose by 0.4 per cent in the year to May with price increases across a number of categories including education and alcoholic beverages.

According to the latest Consumer Price Index (CPI), education costs rose 4.5 per cent compared to the same month a year earlier while miscellaneous goods and services were up 4 per cent. Alcohol and tobacco costs rose 3.4 per cent while restaurant and hotel prices increased by 2.2 per cent.

Prices paid for communications, clothing and footwear, furnishings, household equipment and food and non-alcoholic beverages, were all lower in May as against the same month a year earlier.

Consumer prices in May, as measured by the CPI, remained unchanged versus the previous month. In May 2013, prices fell by 0.1 per cent compared to April 2013.

The categories which caused the largest upward contribution to prices in the year to the end of May were miscellaneous goods and services, restaurants and hotels and alcohol and tobacco.

The Central Statistics Office (CSO) said the divisions which caused the largest downward contribution to prices over the 12 months were transport, food and non-alcoholic beverages and clothing and footwear.

Investec said the latest figures show that inflation pressure remain subdued wiht most categories showing only modest prices changes. Chief economist Philip O’Sullivan said muted overall inflationary pressure continue to provide respite for consumers. However, he warned that a number of factors could reverse this trend including upward press on prices as some of the slack in the economy reduces.

Alan McQuaid of Merrion Capital warned that deflation rather than inflation continues to be the bigger threat to the economy at present, both in Ireland and further afield.

“Inflationary pressures in general are set to remain well contained in the immediate future, and we see Ireland’s average headline inflation rate being below 1 per cent again in 2014. Following an average rate of just 0.5 per cent in 2013, we are at this point in time forecasting a similar figure for this year, but if anything the risks are tilted to the downside,” he said.