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Inflation steady as loan rates fall

THE annual rate of inflation was little changed last month, despite big increases in prices in some areas.

The Central Statistics Office said February's inflation rate was 2.1pc, down slightly from January's 2.2pc.

But consumer prices increased by 0.9pc compared with January, mainly due to higher fuel prices and the end of winter sales.

This did not lift the annual inflation rate because prices in February last year had also risen by 0.9pc.

Clothing and footwear prices jumped by 8.2pc during the month and furniture prices moved up 1.6pc as sales came to an end.

Transport costs rose by 2.7pc due to higher petrol and diesel prices and increased air fares.

But mortgage interest costs fell again, as ECB interest rate cuts were passed on.

Prices of alcohol sold in supermarkets and off-licences also fell, bringing prices in the alcohol and tobacco category down 0.4pc.

A breakdown of the transport category showed that air fares jumped 17.6pc in the month.

Petrol prices rose by 2.3pc, diesel by 1.5pc. Rents also rose by 1.4pc during February, and accommodation costs moved up 1.2pc. The EU measure of prices -- which excludes mortgage repayments -- rose 1.1pc during February, giving an annual increase of 1.6pc.

It means Ireland has the second lowest inflation rate in the EU and the lowest in the eurozone. Only Sweden's is lower at 0.7pc.