The annual rate of consumer price inflation eased back to 4.3 per cent in April from 5 per cent in March, according to the Consumer Price Index published today by the Central Statistics Office (CSO).
According to the CSO the most notable changes were decreases in prices for clothing & footwear; down 2.8 per cent in the year and -0.1 in the month; and prices for furnishings and household equipment which fell by 1 per cent over the last 12 months and -0.2 in the month.
A fall in the price of air fares offset rising fuel costs leading to a 0.9 per cent decrease in transport costs last month although over the year they remain up 3.4 per cent.
In the year to April, food and beverage prices in Ireland increased by an average of 8.1 per cent although the rate of increase slowed to 0.1 per cent last month.
Health costs rose 0.5 per cent last month to 6.2 per cent over the year to April 2007 while education costs are 5.8 per cent higher over the same period.
Annual services inflation stood at 4.8 per cent last month. Inflation was last at 4.3 per cent in January of this year, and prior to that it last reached that level or lower in July 2006.
When the European Union measure of inflation is used, that excludes mortgage interest costs, the annual rate of inflation fell to 3.3 per cent from 3.7 per cent in March.
Bloxham chief economist Alan McQuaid said that despite the fall in April rising oil and food prices meant that global inflation risks remain on the upside.
Although the slowing Irish economy had forced retailers in certain sectors to sell at a discount he said it was "the trend in both global food and oil prices that will in the end determine whether or not Ireland's headline inflation rate retreats back below 4 per cent in the next few months or increases again towards 5 per cent."
Mr McQuaid said it would be no surprise if inflation averaged at over 4 per cent again in 2008.
While welcoming the fall the Irish Small and Medium Enterprises Association (Isme) said Irish inflation was still ahead of the EU average and has only returned to the same rate as the start of the year.
Isme chief executive Mark Fielding said "there is no doubt that the high level of Irish inflation over the last number of months is damaging competitiveness and feeding in to the labour market, leading to increased numbers of redundancies."
Business representative body Ibec said the slowdown in food costs in the month would bring “much needed relief to households which have experienced rises in basic items such as food and energy in recent months”.
