Irish inflation is lowest in EU at 0.9pc, says Eurostat
IRELAND has the lowest rate of inflation in the European Union with prices rising less than 1pc in the year to February 2011, according to the European Union's statistics agency Eurostat.
The figures show that "headline inflation" across the eurozone is rising sharply. Irish headline inflation was 0.9pc in the year to the end of February compared with an increase of 2.4pc across the eurozone. The eurozone rise is well above the "less than 2pc" that the European Central Bank (ECB) sets as its inflation target.
However, "core inflation", a measure that strips out some volatile factors like energy and food prices, is more stable at just 1pc.
NCB Stockbroker's Chief Economist Brian Devine told the Irish Independent that the moderate increase in core inflation means that there is less pressure on the ECB to raise interest rates than some analysts have predicted.
"Core inflation is the relevant measure. A factor like oil prices is not going to keep increasing at the current rate and core inflation is a better reflection of that," he said.
Ireland's relatively low rate of inflation should boost competitiveness, but the data also highlights the worrying lack of consumer demand in the domestic economy.