'Inflation rise will hit poor and elderly hardest'

The poor and the elderly will suffer the most from the sharp rise in inflation, it was claimed tonight.

The rate of inflation has increased from 2.3% in August to 3% last month, which is the highest level for two years.

The Green Party said the figures from the Central Statistics Office (CSO) showed that the effects of higher fuel prices were finally being felt.

“The Government’s failure in not anticipating this response has meant that, not only do real economic threats exist through rising costs to business, but that considerable social costs are likely to be paid by the poor and vulnerable who lack any protection from the rise in fuel prices,” said Finance spokesman Dan Boyle.

He called on the Government to increase the fuel allowance to allow the hardest hit to cope with the fuel price increases through the winter.

Labour Party TD Kathleen Lynch said the Government could pay for the fuel allowance increase through the increased oil revenues its was collecting.

“People should not have to worry about heating their homes, but this is stark reality for those who will find the more than 10% price increase in one month more than they can afford,” she said.

Ms Lynch said the 10.3% rise in the cost of health insurance meant the the cost of VHI had risen 100% since the Government took up office in 1997.

Petrol prices rose by an average of 11.5% in September and are now 22% higher than this time last year.

The CSO said the increase in inflation was due to a rise in clothing and footwear prices following the traditional summer sales, higher petrol, diesel and home heating oil prices and higher health insurance and mortgage repayment costs.

Fine Gael Finance spokesman Richard Bruton said the inflation rate in the past 12 months is 2.5 times higher than in the rest of the EU.

“The real shock is that even with the huge surge in energy prices, five of the top 10 price movers in the past 12 months are separate Government-administered activities,” he said.

Mr Bruton said there had been increases of up to 20% in refuse charges, hospital charges, primary education, secondary education and health insurance.