Annual inflation remained stable at 1.6 per cent in October, figures out yesterday showed.

The Harmonised Index of Consumer Prices released by the National Statistics Office indicated that the upward movement in prices for food, beverages, hotels and recreation were mitigated by drops in transport and communication costs.

Food and beverage prices increased by half a percentage point, exhibiting the largest upward movement in October. This was the result of higher prices for vegetables.

The next largest increase at 0.35 per cent was registered in restaurant and hotel prices.

However, inflation remains within the parameters deemed to be ideal by the European Central Bank, which seeks price stability in the euro area economy.

Inflation had jumped up above the one per cent mark in April when the direct impact on the index of lower electricity tariffs introduced in March 2014 would have worn off.

Between June and September the annual inflation rate increased gradually to 1.6 per cent from 1.1 per cent. The same increase for two months in a row is good news.

The ECB defines price stability as a year-on-year increase in the Harmonised Index of Consumer Prices of below two per cent.

Inflation rates of below, but close to, two per cent are low enough for the economy to fully reap the benefits of price stability, according to the ECB.

Inflation ended up at the centre of controversy during the Budget debate when the Opposition insisted rising inflation was detrimental to consumers. The government had rebutted that inflation was still below the relevant benchmarks and a sign of a growing economy.