Inflation rose to 2 per cent in the year to August on the back of higher prices for clothing and footwear goods, and petrol and diesel.

Consumer prices in August, as measured by the consumer price index (CPI), increased by 0.6 per cent in the month, compared to a rise of 0.2 per cent recorded in the same month last year, according to figures published by the Central Statistics Office today.

Prices on average, as measured by the CPI, were 2 per cent higher in August compared with August 2011.

The most significant monthly changes saw clothing and footwear prices increase 6.6 per cent, transport rise 1.6 per cent, and furnishings, household equipment and household maintenance go up 0.7 per cent. There was a fall for housing, water, electricity, gas and other fuels (-0.5 per cent).

The most notable price changes in the year were increases in education (+9.6 per cent), transport (+8.3 per cent), miscellaneous goods & services (+5.4 per cent) and alcoholic beverages and tobacco (+3.3 per cent). However, prices fell for furnishings, household equipment and routine household maintenance (-2.3 per cent), communications (-2.0%) and recreation and culture (-1.4 per cent).

Housing, water, electricity, gas and other fuel prices fell mainly due to lower mortgage interest repayments, although this was partially offset by an increase in the price of home heating oil, the CSO points out.

The annual rate of inflation for Services was 2.3 per cent in the year to August, while goods increased by 1.6 per cent. Services, excluding mortgage interest repayments, increased by 4.1 per cent in the year since August 2011.

The Irish Small & Medium Enterprises Association (Isme) warned of the continuing threat to business competiveness from state controlled costs, which it said was being masked in the overall figures.

The Association called for a full review of relevant business costs, saying they should be benchmarked internationally.

“The costs imposed by government on business continue to act as a deterrent on our export led recovery and sustaining local employment. It is essential that these costs are reduced to allow us to compete,” Isme CEO Mark Fielding said.