Inflation drops to three-year low

Food prices increased 1.5% while energy has dropped by more than 14%

Prices fell by 0.8% between August and September.

Consumer prices rose by just 0.2% in the 12 months to September, the lowest level of inflation since March 2021.

New data from the Central Statistics Office (CSO) shows the Harmonised Index of Consumer Prices (HICP) is estimated to have increased marginally over the past year and fallen by 0.8% since August.

The CSO said energy prices have fallen by 14.1% over the previous 12 months while food prices have increased by 1.5% in the same period.

The HICP excluding energy and unprocessed food is estimated to have increased by 1.8% since September 2023.

"Prices for consumer goods and services in Ireland are estimated to have increased by 0.2% in the past year," Anthony Dawson of the CSO said. "This is the lowest level of HICP inflation in more than three years (March 2021) when the HICP increased by 0.1% annually."

The corresponding rate for the Eurozone will be published on Tuesday. 

Italian inflation sank below 1% according to a report Monday from its statistics body. The data is set to heap more pressure on the European Central Bank to accelerate interest-rate cuts.

Consumer prices rose just 0.8% from a year ago in September compared with 1.2% in August. The deceleration was mainly due to energy, transport and communication costs.

The figures are part of a general retreat across the 20-nation euro zone, where readings for France and Spain, released Friday, plunged below the ECB’s 2% target. In response, investors have ramped up bets that October will bring the year’s third reduction in borrowing costs.

Italy would welcome an October rate cut — an outcome money markets reckon has an 80% chance of materialising. Prime Minister Giorgia Meloni says looser monetary policy is needed to help European economies grow. Her government is targeting expansion of about 1% in 2024 but needs more to shrink a debt pile exceeding 130% of output.