New figures released by the Central Statistics Office today showed that the annual rate of inflation fell to 3.9% in November.
This is the first time since September 2021 that the annual rate has been less than 5%. The inflation rate reached 5.1% in October.
Energy prices were the biggest contributor to pushing inflation higher, and now falling energy prices have taken a big chunk out of the headline inflation rate.
Last month, electricity prices were down nearly 10%, gas was down 13%, and home heating oil was down 5.4%, making it 17% cheaper than a year ago.
But leaving energy aside, there is still a lot of price pressure left.
Food inflation remained above 6% year-on-year, with the prices of some food products such as dairy falling while the prices of other commodities such as sugar and rice continue to rise.
Today’s figures show that mortgage interest payments are up 37% compared to last year. When excluding them, the inflation rate last month was 2.8%.
Overall, goods inflation was 1.7%, while services inflation, when excluding mortgage interest payments, was 3.8% on an annual basis.
The expected future path of inflation will become clearer when ECB President Christine Lagarde holds her usual press conference following the Governing Council’s interest rate decision later today.
A decline in oil prices in global markets led to a decline in gasoline and diesel prices last month, despite increases in the carbon tax. On an annual basis, the price of gasoline decreased by 0.9%, while the price of diesel decreased by 10.5% compared to last year.
Flight and holiday prices also fell last month but are both higher than a year ago, with the cost of bundled holidays up 32% compared to November 2022.
Prices in cafes and restaurants are also up just over 7% from a year ago, with similar increases in pub prices. Hotel prices fell last month but rose 5.6% year-on-year.
Other services continue to rise with hairdressing prices up 7.7% year over year, while health insurance is up 10.2% and home insurance is up just over 11%.