Inflation in Ireland falls below 2pc for the first time in three years

Prices continued to rise last month, but the rate of increase is easing, according to a measure of inflation used across the eurozone.

The EU Harmonised Index of Consumer Prices (HICP) for Ireland is estimated to have increased by 1.7pc in the year to last month and it grew by 0.3pc since February.

It is the first time since June 2021 that inflation has fallen below 2pc.

The European Central Bank (ECB) has a target rate of 2pc for inflation.

There are hopes the drop in inflation across Europe will mean the ECB will soon begin a cycle of interest rate reductions.

The “flash estimate” for last month shows the index is down from an annualised rate of 2.3pc in Ireland in the year to February.

In the same period, the rate of the HICP index for the eurozone was 2.6pc.

However, the price of petrol and diesel, broadband and TV services, and the cost of health insurance have all risen this week, which is expected to keep pressure on household budgets.

Energy prices here are estimated to have fallen by 3.1pc last month.

In the past year, statisticians at the Central Statistics Office (CSO) estimate that energy prices decreased by 8.4pc over the 12 months to last month.

Food prices are estimated to have decreased by 0.1pc in the last month, but they have risen by 2.6pc in the last 12 months.

The HICP excluding energy and unprocessed food is estimated to have increased by 2.8pc since March last year.

Tomorrow, Eurostat will publish flash estimates of inflation from the HICP for the eurozone for last month.

Anthony Dawson, statistician in the CSO’s prices division, said: “The latest flash estimate of the Harmonised Index of Consumer Prices, compiled by the CSO, indicates that prices for consumer goods and services in Ireland are estimated to have increased by 1.7pc in the past year.”

Consumers were warned that the last of the three energy credits announced in the Budget are to be paid at the end of this month.

Paul Walsh of Peopl Insurance said: “This is likely to be the last energy credit paid to households this year, unless the Government decides to pay more next winter.

“Households will feel the pinch once the last of these credits is paid because while energy costs have fallen, they haven’t fallen enough to make a real difference to people’s pockets.”

Mr Walsh said Irish households will be feeling the effects of the record-high inflation of recent years for some time to come. This means it is important that people do what they can to improve their household finances.

“Shopping around, so that you’re not paying more than you need to for something, has never been more important. While the cost of many goods and services is still high, retailers and providers are still competing for business and consumers need to leverage this competition and make it work for them,” Mr Walsh said.

“Shopping around will invariably help cut costs and put more money back into your pocket.”

There is a common belief that sticking with the same product or provider will be rewarded with loyalty perks, but that is not always the case, he said.

The insurance market is a prime example of this. For example, you could save over 15pc a year on your premium by shopping around for car insurance.