Inflation figures - Price hikes will fuel wage demands

In the face of a three-year high inflation rate of 3.8% and the prospect of further higher interest and fuel charges, the message to workers on restraint in the pay talks from Finance Minister Brian Cowen is likely to fall on largely sceptical ears.

The latest inflation figure from the Central Statistics Office (CSO) completely outstrips the average European rate of 2.2%, following the 0.8% last month, and is now verging on 4%.

It means that inflation rose by 1.3%, or almost one-third, since the beginning of this year, and Ireland is already one of the most expensive countries in which to live in Europe. Last month, household items such as electricity, gas and other fuel prices rose.