Inflation in Ireland eased to 8.6% in September, the latest Eurostat figures show, but strong growth in energy and food still suggests there is no major easing of price pressures or a delay in rate hikes anytime soon.

The rate of inflation here has fallen from 9% in August and is well below this year’s peak of 9.6%, which was reached in the summer months, but remains above May’s level of 8.3%.

This means that Ireland has the fourth lowest rate of inflation in the Eurozone and is also lower than the overall Eurozone average of 9.9%.

The figure of 8.6% here is still slightly behind France, which has the lowest rate at 6.6%, and Malta at 7.4%. Finland, at 8.4%, has the third lowest rate, the figures show.

However, Ireland, which entered the crisis, already had one of the highest price levels in Europe. The inflationary crisis began during the recovery of the global economy from the pandemic, but flared up Russia attacked Ukraine in February.

Russia is an important supplier of gas and oil to Europe, while Ukraine is a major producer of wheat and other grains for world markets.

Eurostat figures are closely watched, with the latest figures offering little hope for home and business borrowers as the European Central Bank raises interest rates to help stem a price surge that is spreading across all parts of the economy.

The eurozone rate of 9.9% rose from 9.1% in August and rose sharply from 3.4% last September.

Energy prices cause inflation

The latest figures show that mainly energy prices, as well as food, continue to drive inflation in most parts of Europe.

The highest rates of inflation remain in the Baltic countries, which are most closely related to Russian energy supplies. Estonia has more than 24% inflation in the Eurozone, followed by Lithuania (22.5%) and Latvia (22%).

Meanwhile, new figures showed UK inflation rose to 10.1% in September and markets are betting the Bank of England will raise interest rates by as much as 1% at its next monetary policy meeting early next month.

The latest inflation report does little for easing political pressure on British Prime Minister Liz Trussafter falling confidence in the markets forced the new administration to abandon a large part of its mini-budget.

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