McCreevy welcomes slight dip in inflation

POLITICIANS' views clashed yesterday in response to the slight dip in the annual inflation rate.

Finance Minister Charlie McCreevy welcomed the latest figures showing a fall in the annual cost of living from 4.7% in May to 4.4% in June. But Fine Gael finance spokesman, Richard Bruton, countered that inflation remains "doggedly high."

Inflation measured by the Consumer Price Index rose 0.2%, well below the 0.5% growth in June last year. Mr McCreevy agreed the overall trend was still very high and he accepted that the annual figure for 2002 would now be 2.5% and not the 4.25% target in his Budget. Speaking after an Ecofin meeting in Brussels, he said figures masked domestic inflation in the services sector.