THE LATEST INFLATION figures show a slight increase in prices of just 0.4% in June compared to June 2013.

However, when ECB rate cuts are excluded from the data, annual inflation rises from 0.6% in May to 1% over June and service price inflation increases from 3.1% to 3.3% respectively – the fastest rate of growth since September 2012.

The CSO data shows that on average, according to the Harmonised Index of Consumer Prices, prices were up 0.5% last month compared to June 2013.

The highest increases were recorded in education costs (up 4.5%), restaurants and hotels (up 2.2%) and insurance (up 6.6%), while there were falls in prices for clothing and footwear (down 3.4%), food and non-alcoholic drinks (down 2.4%) and communications (down 4.7%).

Mortgage interest costs dropped 10% in the year to June, up slightly on the 9.4% recorded in the year to May.

Meanwhile, goods inflation fell 1.7% (compared with a 1.8% drop in May). Davy Research says that this deflation reflects a slight energy price increase for a second consecutive month in June, while weak import prices are helping to hold the prices of other goods.

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