Housing costs such as higher mortgage payments pushed the annual rate of inflation to 4.5 per cent in August from 4.2 per cent in July, according to the latest Consumer Price Index.
The index prepared by the Central Statistics Office shows that the annual rate of inflation for goods was 1.7 per cent in August while the corresponding rate for the services sector which includes housing , health and education stood at 7 per cent.
The consumer index reveals the rising cost of housing as the main culprit for the recent spike in inflation. Mortgage interest payments have risen by 33 per cent in the past twelve months, natural gas is 25 per cent higher while heating oil has risen by 13 per cent.
The surge in energy prices also spills into transport costs with petrol up by 13 per cent, the other car-related costs up by 11 per cent and the cost of air travel has risen by 17 per cent.
The most notable monthly increases in the basket of goods and services were in clothing and footwear which rose by 7.3 per cent as a result of the end of the summer sales and household furnishings which rose by 1.2 per cent.
Transport costs increased by 1.2 per cent on average over the month of August according to the index. The cost of renting a car rose by 9 per cent, petrol rose by 2.9 percent and motor oil by 1 per cent. These increases were partially offset by decreases in boat fares (-2.9 per cent) and spare parts (-0.1 per cent).
However food prices remained unchanged in August and have only risen by 1.6 per cent this year, well below the overall rate of inflation.
A breakdown of the food sub-index shows that many items once covered by the Groceries Order such as breakfast cereals, margarine and sweeteners have fallen in price with the price rises coming from fresh meat, fish and cakes which were exempt from the order.