Inflation down on rate cut

By Andrew Bushe

DUBLIN — Cuts in interest rates in preparation for entry to EMU next month led to cheaper mortgages and brought down the rate of inflation to 2.1 percent at the end of November, according to the Central Statistics Office.

The monthly fall in November of 0.4 percent was greater than expected as a result of the lower housing cost element following the mortgage cuts.

The inflation rate is now the lowest since last March.

Price reductions during the month included housing, down 4.1 percent; household goods, down 0.3 percent; food, down 0.2 percent, and clothing and footwear, down 0.8 percent.

There were pre-Christmas prices rises for clothing and footwear, 0.8 percent, and soft furnishings and furniture, 0.3 percent. Increases were also recorded for newspapers, toilet accessories and cleaning materials.

Annual inflation peaked in August at 3.2 percent — the highest since May 1992.

Last week, Ireland joined its other partners in the euro currency zone in cutting interest rates to 3 percent.

Economists expect inflation to fall to about 1.8 percent in December and to average about 2 percent next year.