THE COST OF LIVING in Ireland rose by 0.4 per cent in March, according to figures from the Central Statistics Office.

The latest Consumer Price Index shows that the cost of living is up on an annual basis, though only by 0.5 per cent – well below the European average.

Clothing and footwear costs grew by the highest amount in March, up by 3.8 per cent compared to February, while transport costs were up by 1.2 per cent.

There were also small increases in prices at restaurants and hotels, which rose by 0.4 per cent. The cost of other ‘miscellaneous goods and services’ rose by 1.3 per cent.

Communications costs fell by 1.1 per cent in March, however, while the cost of food and non-alcoholic drinks fell by 0.5 per cent, and the price of furniture and household equipment dropped by 0.3 per cent.

When calculated using the EU’s Harmonised Index of Consumer Prices, inflation is still calculated at 0.4 per cent in March, but rose by a slightly higher 0.6 per cent over 12 months.

Ireland’s inflation rate remains well below the Eurozone’s rate of 1.7 per cent.

The continuing low rate of inflation in the Eurozone has led to speculation that the European Central Bank could lower its main interest rates when it meets next month – which would be good news for holders of tracker mortgages, whose interest rates would fall immediately.

The ECB’s mandate is to guarantee regular price stability, which is usually interpreted as meaning keeping inflation to around 2 per cent each year.