Acts of god, mortal sins, venial sins and a slight hint of redemption. All these things are present in the latest inflation numbers for August.

The consumer price index has risen to 4.5 per cent, its highest rate in over three years, according to yesterday's Central Statistics Office (CSO) figures.

Eight straight monthly increases have taken the Republic's inflation rate to 4.5 per cent, a full two percentage points higher than the level at which it stood last December.

It should be pointed out that the latest number excludes the impact of August's rate hike, not to mention another interest rate rise which is expected next month.

The energy regulator will today announce further increases in electricity charges. Add in expected increases in gas prices, and most analysts accept that inflation could enter next year at a rate of 5.5 per cent, well above the 4 per cent per annum consistent with the latest social partnership agreement.

Some of this is an act of God. We have had such acts of God before: in 1999, inflation climbed from 1.6 per cent to 5.6 per cent in 2000, partly due to a fall in the value of the euro and interest rate increases at the time.

But there was also a fair amount of mortal sin; high rates of growth in public spending and significant falls in personal taxation flooded the economy with money.

Those policies were sustained in the years leading up to the election and inflation stayed close to 5 per cent for three years running - far above the average rates prevailing in competitor economies.

Half a decade later, international factors - oil prices and interest rates - are again affecting the cost of living. But, also as before, domestic factors are causing Ireland's inflation rate to diverge once again from the euro-zone average.

The housing market is one of these. Although we suffer the same rate increases as other euro-zone countries, our preference to own rather than rent, our far higher house prices and our preference for variable rather than fixed-rate mortgages leave us far more exposed to interest rate rises than the euro mainland.

Look behind these and you detect a whole host of venial sins, including slow progress on transport policy, poor planning laws and a failed spatial strategy. For these reasons, comparing our consumer price index (CPI) with the standard euro-zone harmonised index of consumer prices (HICP) is not as invalid as some would make out.

Because the HICP excludes the impact of changes in the cost of mortgage repayments, comparing Ireland's HICP with that of the euro zone is statistically the most valid way of comparing inflation here with inflation in the euro zone.

The difference between the CPI and HICP reflects valid differences in what drives the cost of accommodation here compared to the euro mainland.

But even Ireland's HICP inflation has risen dramatically, from 1.9 per cent in December to 3.2 per cent in August. By contrast, euro-zone inflation has remained stable at just above 2 per cent, despite the euro zone enduring the same acts of God as ourselves.

So who are the mortal sinners this time? Inflation in electricity, fuels and water costs are running at two percentage points above the euro-zone average. Compared to its euro-zone counterparts, Government-controlled companies are exacting higher mark-ups behind the smokescreen of rising fuel prices. Annual inflation in the State-run transport sector is 5.2 per cent, while in the health sector it is 4.1 per cent.

In the services sector writ large, inflation is 7 per cent.

And this is where the redemption comes in. Six months after the abolition of the Groceries Order, it appears that, in the food sector at least, inflation is being tamed, coming down to just 1.6 per cent in August, from a height of 2.7 per cent in May, when the order began to take effect in the marketplace.

By applying similar reforms to the services sector, the Government may yet secure more redemption and - just perhaps - some forgiveness.

Oh, and one more thing: Minister for Finance Brian Cowen's reaction to yesterday's figures - a call for more competition in that sector - is welcome.

But it would have more credibility were he to take steps in the next budget to dampen inflationary growth in public spending and strengthen incentives for SSIAs to be saved.