THE COST OF LIVING in the Eurozone rose by 2.2 per cent in 2012 – the lowest rate of inflation for several months – according to new figures published this morning.

Eurostat’s data showed that the EU’s Harmonised Index of Consumer Prices rose by an estimated 2.2 per cent in the twelve months ending in December, the same figure as had been given for the year ending in November.

The drop in the last few months is relatively stark; inflation had stood at 2.6 per cent in the year ending August and September, and at 2.5 per cent in October.

Food prices rose by 3.1 per cent in 2012, while energy prices were up by 5.2 per cent. Prices of non-energy industrial goods was up by 1.1 per cent, while the price of services rose by 1.1 per cent.

The inflation rate is significantly higher than in Ireland, where the most recent figures – for November – showed the HICP as having risen only by 1.6 per cent in the 12 months up to then.

The Consumer Price Index, the CSO’s own preferred measure of inflation, showed an annual increase of 0.8 per cent at that time.

The falling rate of inflation could encourage the European Central Bank to reduce interest rates at its first meeting of 2013, to be held next Thursday in Frankfurt.

The ECB usually interprets its mandate – as ensuring price stability – to mean that inflation would ideally be held at 2 per cent.