Cost of living expected to fall
Business chiefs have predicted the cost of living will fall after the rate of inflation remained steady for the last three months.
The Irish Business and Employers Confederation (Ibec) said the current turmoil in global markets had caused oil prices to drop and lower-than-expected interest rate increases.
Official figures from the Central Statistics Office revealed prices had soared 2.7% in the last year but high street prices have remained stagnant for the three months to the end of July.
Ibec chief economist Fergal O'Brien said that a silver lining of the current market turmoil will be further falls in inflation over the next year or so.
"As a result of recent market turmoil, oil prices have dropped and interest rates will be lower than previously expected," Mr O'Brien said. "This is good news for Irish consumers. At the very least, the ECB will dismiss any notions of further interest rate increases and recent hikes could even be reversed. This will provide some relief for hard-pressed households."
The most notable price increases in the year were housing, water, electricity, gas and other fuels, up by 10.3%, transport, up by 3.5%, and health, which experienced a 3.4% rise.
Miscellaneous goods and services, such as hairdressing, personal goods, childcare, insurance, weddings and funerals, increased by 7.2%.
Ibec predicted inflation would average 2.5% this year and rise no further than 1.5% in 2012.
The Irish Small & Medium Enterprises Association (ISME) accused the government of failing to tackle the increasing "government-controlled" costs such as energy, transport and local authority charges.
ISME chief Mark Fielding said: "The constant theme among businesses struggling to survive is the increasing costs of doing business in this country, in particular the costs of rates, rents, energy, transport, labour and local charges. Unfortunately, there does not seem to be the appetite at government level to introduce the reforms necessary to tackle these rising business costs."