The average price paid by consumers increased by 1.6% during the year, according to the CSO’s consumer price index.
Despite the annual increase, the price of goods has actually fallen by 0.1% from June to July. This was the second straight month that consumer prices have fallen.
Falls in the price of clothing and at off-licences offset increases in transport, restaurant, and hotel costs.
The most significant fall in prices was a 5.1% decline in the cost of clothing and footwear, largely due to the summer sales.
Other areas to record falls since June included alcoholic beverages and tobacco (-1%) and furnishings, household equipment, and routine household maintenance (-0.7%).
The CSO put the fall in alcohol prices down to lower prices for wine and beer sold in off-licences and supermarkets.
Two areas where there were price increases over the last month were the transport sector (+1.3%), and restaurants and hotels (+0.3%).
The CSO said the cost of airfares had pushed up transport costs, but this increase was partially offset by falls in petrol and diesel prices.
When looked at on a 12-month basis there were still some significant price increases.
The cost of education was up 9.4%, transport rose 7%, miscellaneous goods and services increased by 4.6%, with alcoholic beverages and tobacco rising 3.3%.
The only sectors declining in 12 months were furnishings, household equipment, and routine household maintenance, all down 2.4%; recreation and culture, down 1.6%; and communications, also down 1.6%.
The EU measure of prices — which excludes mortgage repayments — fell by 0.1% in the month compared to a decrease of 0.2% the same month last year.
Prices on average, as measured by the harmonised index of consumer prices, were 2% higher in July compared with Jul 2011
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