Consumer prices rose by 0.4% in the month of August, the latest figures from the Central Statistics Office show today.
The CSO said that prices on average were 5.9% lower at an annual rate in August, unchanged from the July rate.
Prices for clothes and footwear rose by 3.4% in August as the traditional summer sales came to an end, while costs for housing, water, electricity, gas and other fuels increased by 1.1% due to higher average mortgage interest repayments.
Transport costs also rose by 1.1% due to increases in airfares and petrol and diesel prices. Food prices, however, fell by 1% in August.
The CSO says that service prices fell by 6.8% in the year to August, while goods fell by 5%.
Bloxham economist Alan McQuaid says today's figures have come as a bit of a surprise and at face value suggest that the sharp fall in prices may have come to an end and the annual rate of decline is now unlikely to go above 6%.
However, he says it is still too early to say the battle against deflation has been won. 'There is likely to be an average fall in the headline CPI of around 4.25% this year as against an average increase of 4.1% in 2008,' he adds.
He says that although domestic gas and electricity prices are set to fall in the near-term, overall energy costs in the coming months are likely to rise as last year's sharp oil price hikes exit the inflation calculations. He believes that mortgage costs too are set to continue to push higher, irrespective of what the ECB does with official interest rates.
