Consumer prices rose by 0.4 per cent in August, the first increase since September of last year.
The Consumer Price Index (CPI) published today shows prices in August increased by 0.4 per cent in the month compared to a drop of 0.8 per cent in the month of July.
Prices fell on average by 5.9 per cent in the year to the end of August, a similar decline to the record annual drop last month.
The August figure compares to an increase of 0.5 per cent recorded in August of last year.
A recovery in the cost of clothing and footwear after the summer sales, as well as increases in housing costs, water, electricity and gas due to higher average mortgage interest payments, contributed to the rise in prices in August.
The Central Statistics Office (CSO) said these were partially offset by decreases in private rental charges.
Transport costs rose due to increases in airfares and petrol and diesel prices. Food and non-alcoholic beverages fell due to lower prices across a wide range of food items.
The most notable changes in the year were decreases in the cost of housing, water, electricity, gas and other fuels (-27.8 per cent), clothing and footwear (-13.2 per cent), food and non-alcoholic beverages (-4.8 per cent) and transport (-3.7 per cent).
There were increases in miscellaneous goods and services (+7.9 per cent), alcoholic beverages and tobacco (+7.7 per cent), education (+3.9 per cent) and health (+2.7 per cent).
Services prices fell by 6.8 per cent in the year to August, while goods fell by 5 per cent.
The most significant monthly price changes, according to the CSO, were increases in clothing and footwear (+3.4 per cent), housing, water, electricity, gas and other fuels (+1.1 per cent) and transport (+1.1 per cent).
There was a decrease in food and non-alcoholic beverages (-1 per cent).
The CPI excluding tobacco index for August increased by 0.4 per cent in the month and was down 6.5 per cent in the year.
Excluding energy products, the index rose by 0.2 per cent in the month and decreased by 5.4 per cent. The CPI, excluding mortgage interest, increased by 0.2 per cent in the month and was down by 1.8 per cent in the year.
The EU Harmonised Index of Consumer Prices (HICP) increased by 0.2 per cent in the month, compared to no change recorded in August of last year.
On average, prices as measured by the HICP, were 2.4 per cent lower in August compared with August 2008.
Ulster Bank forecast consumer prices to fall by 4.2 per cent for the year — the biggest drop since the height of the Great Depression in 1931.
Fine Gael's finance spokesman Richard Bruton warned a return to inflation must spur Fianna Fáil to curb business costs.
"A focus on wage cuts alone is simply not fair," he said.
Mr Bruton claimed prices from sectors run or controlled by the Government were continuing to increase.
"A serious assault on competitiveness must also confront boardroom pay, rip-offs, monopoly profits, rents, professional fees, State charges and utility prices," he said.
"As a community we must be willing to move in a co-ordinated way on all fronts and be ambitious enough to do the job in one go."