New figures from the Central Statistics Office show that consumer prices on an annual basis rose by 0.4% in August due to higher rents and transport costs.

This marked the biggest increase in consumer prices since April.

The CSO figures show that housing, water, electricity, gas and other fuel prices were up 3.2%, while the cost of eating out and hotel accommodation rose by 2.6%. 

Transport costs - higher prices for petrol, diesel and air fares - increased by 2.2%, while communication costs were also 2.3% higher.

But August also saw a 4.8% fall in the price of clothing and footwear due to summer sales, while price for recreation and culture activities - including the price of computers and DVD - were down 2.4%.

The cost of motor insurance was also 14% lower in August compared to the same time last year, but it showed an increase of 0.2% on a monthly basis. 

Food and non-alcoholic drink prices fell by 1.7% on the back of cheaper prices for a range of products including bread, jam, honey, chocolate, meat and vegetables.

Today's CSO figures also show that consumer prices rose by 0.4% in August compared to July due to more expensive clothes and footwear after the summer sales, and higher prices for food and drinks when eating out.

Ireland has been the European Union's fastest growing economy for three years, but inflation has remained broadly flat during that time.

Commenting on today's figures, Merrion economist Alan McQuaid said that the country's average inflation rate was 0% in 2016, compared with -0.3% in 2015 and 0.2% in 2014. 

"Based on the figures for the first eight months of the year and assuming a pick-up in inflation over the rest of 2017, it looks like the average for the year as a whole will be around 0.7%," he said. 

"Although higher energy costs should play a part, the services sector will be the main source of upward pressure," he predicted.