Government criticised over jump in inflation rate

The Government is coming under fire from opposition politicians and business groups today following another rise in Ireland's inflation rate.

The Central Statistics Office says inflation hit 3.9% in May, mainly due to rises in the cost of mortgages, oil, rents, hotel accommodation and eating out.

Labour Party TD Kathleen Lynch has responded by accusing the Government of failing to draw up a strategy to tackle rising prices.

"The major contributory factor is the price of oil, but the rest of Europe is paying the same price for oil as we are and I don't understand how it adds significantly to our inflation rate and not to others," she said.

"It's a very, very worrying trend."

Fine Gael TD Richard Bruton said young families would suffer most due to the increased cost of mortgages, home-heating, health insurance and childcare.

"There is a need for the Government to look at why our regulation of these critical markets is not delivering the same competitive conditions that happen in the rest of Europe," he said.

The Irish Small and Medium Enterprises Association has said the Government's failure to reign in the public-sector pay bill is a major part of the problem for the business community.

"Public sector pay has gone through the roof, it's 40-something% ahead of the private-sector pay," said spokesman Mark Fielding.

"That has to be curtailed because that is driving increased costs when it comes to refuse collection, when it comes to local-authority rates, when it comes to water rates.

"That is having an effect on businesses, who are the only people who are actually paying these costs."

Green Party Finance spokesperson Dan Boyle said the threat of a 5% rate of inflation is looming on the horizon.

“These figures show an ever-increasing upward trend for a rate of inflation which is being felt by people in the payment of their regular bills,” he said.

“The inflation rate has now reached a level from which the Government cannot hide or ignore.

“After several months of increases in the rate of inflation there is nothing to indicate that this trend will reverse in the near future and it is now possible that Ireland will face a 5% rate of inflation.”