Inflation back in positive territory but ‘pressures will remain well contained’

Rising costs of clothing, transport and other services saw inflation move back into positive territory last month, with the annual rate rising to 0.2%, and prospects high for a further increase this month.

January’s figure, published yesterday by the CSO, followed a 0.1% annualised fall in February. However, an average headline inflation rate of around 0.5% — in line with last year — is expected for 2014 as a whole.

“While ECB rates and energy prices continue to act as a drag on prices, domestically-driven services price inflation is now growing at the fastest rate in two years,” said David McNamara of Davy Stockbrokers.