In December the annual rate of inflation rose to 3.2%, the latest “flash estimate” from the Central Statistics Office shows.

After decreasing from over 3.5% to 2.5% in November, a slight rise in the rate was not unexpected.

The sharp fall in inflation in November was mirrored across the euro zone and gave rise to heightened speculation among market traders that the European Central Bank would start to cut interest rates in the coming months.

Between July 2022 and September 2023, the ECB raised rates by 4.5 percentage points at ten successive meetings.

The Harmonised Index of Consumer Prices (HICP) which shows the “flash estimate” of inflation which is used to compare consumer price movements across the EU.

(CPI) The Consumer Price Index  which is the official measure of inflation in Ireland – includes items such as mortgage interest payments, which do not feature in the HICP.

While mortgage interest payments are increasing, the CPI rate is generally higher. It registered at 3.9% in the year to November.

The CSO has said the core HICP rate, which excludes energy and unprocessed food, was estimated at 4.3% in the year to December, up from the rate of 3.9% in the year to November.

Yesterday’s CSO figures show that energy prices are estimated to have fallen by 2.6% in December and decreased by 6.4% on December 2022.

Also, transport costs rose by 0.7% in the month and increased by 3.9% in the 12 months to December, the CSO added.  The Food prices remained on a monthly basis in December, but then increased by 5.2% on an annual basis.

The euro zone statistics agency, Eurostat, will publish flash estimates of inflation for the euro zone for December today.