New figures from the Central Statistics Office today show that the rate of inflation in August fell to 2.3% from a rate of 2.4% in July.
The CSO says that consumer prices last month increased by 0.4% compared to a rise of 0.6% in August last year.
The figures show that the annual rate of inflation for goods was 0.8% in August, while the corresponding rate for services was 3.5%.
The CSO says that the most significant monthly price changes were increases in clothing and footwear, which rose by 8.4% after the traditional summer sales season ended. Furnishings and household equipment also rose 1.3% after the summer sales.
Transport costs rose by 0.6% with higher prices being charged last month for petrol and diesel as well as increased car rental costs. Health charges were up 0.5% due to increases in doctors' and dentists' fees.
Those increases were partially offset by a fall in recreation and culture prices which saw a 0.8% decrease last month as a result of lower prices for package holidays.
Inflation is expected to rise in September however as the impact of higher oil and petrol prices feeds through to the consumer price index.
Today's figures show that energy costs, including the price of electricity, gas, and other domestic and transport fuels have risen by a total of 12.5% on average over the past 12 months. This figure is expected to rise again in September.
The EU Harmonised Index of Consumer Prices increased by 0.5% in the month, compared to an increase of 0.6% the same time last year. The annual rate of inflation, as measured by the HICP, fell from 2.2% in July to 2.1% in August.
IBEC chief economist David Croughan said the figure was in line with expectations but inflation was likely to tick up over the next few months as the impact of energy prices continued to be felt. He said the Government could help alleviate some of the inflationary impact of energy prices by reducing excise duties on oil products.
ISME chief executive Mark Fielding said the latest figures could send out the wrong message if the impression were given that costs have been kept under control. He warned against complacency, saying the impact of rising oil prices alone had the potential to significantly further increase the costs of doing business and the headline inflation rate.
SIPTU's Jack O'Connor also said the August index did not take account of the further sharp acceleration in fuel costs during the month of September.
He added that the cost of living was varying significantly according to income, calling for a future Household Budget Survey to provide different cost of living indices in respect of a series of low to medium to high income groups.
