The pace of Irish inflation cooled somewhat to 7% in March, but underlying price pressures here and elsewhere in the eurozone could yet convince the hawks at the European Central Bank to keep driving interest rates higher, analysts say.
Central Statistics Office figures show the annual inflation rate in Ireland eased to 7% from just over 8% in February, after the prices of energy products fell by almost 1% in the month, probably reflecting the sharp declines in wholesale market prices for gas and crude oil since the start of the year.
However, households may derive only limited comfort as the official figures show that price pressures across the Irish economy appear to remain acute, with the annual inflation rate for food prices running at 13.5% in March, after increasing 1.1% from the previous month.
And consumer transport costs, which had only risen by 0.6% from March last year thanks to a number of factors including a freeze on public transport tickets, nonetheless bounded 2.2% higher in the latest month.
The CSO release reflects so-called harmonised inflation figures that make comparing price pressures that much easier across the EU as a whole. Eurostat is due to publish a full set of national figures on Friday, but some March figures that are already available for Spain and Germany show the same picture of underlying levels of inflation remaining stubbornly high.
Figures from Spain's statistics office show that the headline annual inflation rate there almost halved to 3.1% in March from 6% in February, after energy prices tumbled.
However, a measure of core inflation, which excludes energy and food prices, also fell in Spain in March, but only slightly, to 7.5%.
Something similar happened in Germany — Europe's biggest economy — where the headline annual inflation rate in March slowed to 7.8% from 9.3% in February, but underlying inflation was still running at 7.5%.
The German figures, in particular, could strengthen the hand of hawks at the European Central Bank who argue that further interest rate rises will be required to stop underlying inflation pressures becoming embedded, even as household energy costs fall sharply following sharp declines in the wholesale price of gas, economists warn.