The cost of living has fallen to the lowest level in 17 months.
Economists now expect prices to keep falling as weak consumer demand drives down inflation.
Lower petrol and diesel prices and strong competition among retailers trying to sell clothes and footwear in the summer sales saw inflation fall to 1.7pc in June when compared with a year earlier, the Central Statistics Office said yesterday.
Furnishings and household equipment prices were also lower due to the sales while housing, water, electricity and gas prices dropped due to falls in the cost of home heating oil.
Transport costs rose in the month due to higher airfares though
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Economist with Merrion Stockbrokers Alan McQuaid said inflation would fall back further.
