Unions have warned that the rising cost of living will have a “serious impact” on forthcoming national pay talks.
Economic advisor to the Irish Congress of Trade Unions (Ictu), Paul Sweeney, said there was “serious concern” at the latest inflation figures released today that show the rate of inflation in March rose to to 5 per cent, up from 4.8 per cent the previous month.
A 2.5 per cent climb in petrol and diesel prices and a 1.7 per cent rise in clothing and footwear costs contributed to the rise. Crude oil hit a new record of over $112 a barrel last night, taking its 12-month increase to 75 per cent.
Calls for pay restraint cut very little ice with the bulk of our membership - Paul Sweeney of Ictu
“Irish price levels are already 21 per cent above the EU15 average for consumer services and 14 per cent above it for consumer goods price levels,” Mr Sweeney said.
“This will obviously have a serious impact on any new pay talks.”
He said the Republic had seen “stagnation in real wages” for those on mid-level and low pay, while remuneration for those at the top had “ballooned”.
“In that context, calls for pay restraint cut very little ice with the bulk of our membership”.
The Central Statistics Office figures released this morning showed the cost of housing, water, electricity, gas and other fuels increased by 1.2 per cent last month, due to rising mortgage interest repayments, local authority rents and home heating oil. The annual inflation rate for this sector is now 12.3 per cent.
Sharp increases in the cost of milk, meat and fish products saw food inflation rise 0.9 per cent last month, bringing annual food price inflation to 9.3 per cent.
Eating out at restaurants and hotels also became more expensive last month do to higher alcohol and food prices, rising 1 per cent in March. The annual price increase is now 3.2 per cent.
Inflation was last at 5 per cent in November 2007. In January the rate had fallen to 4.3 per cent.
Alan McQuaid of Bloxham Stockbrokers questioned why falling import costs for retail items - due to the record strength of the euro against the dollar and sterling - were not being passed on to consumers.
“It would be useful if the authorities looked in to why we are still paying more for goods imported from the UK and or the US despite the euro’s appreciation”, he said.
He said it was “imperative” that the Government ensure that wage costs and public service charges were kept down to ensure the economy remains competitive.
Labour Party finance spokewoman Joan Burton said the inflation data was “grim” and agreed that retailers were exploiting consumers by not passing on savings from the strength of the euro against the dollar and sterling.
“Recent surveys have shown that some retailers, particularly UK based ones, are actually marking up their prices by as much as 100 per cent,” she claimed.
“The Government’s one ‘big idea’ – the abolition of the Groceries Order – has failed to deliver the results promised and the National Consumers Agency has yet to show that it has any real teeth,” Ms Burton said.
ISME chief executive Mark Fielding said that with inflation at 5 per cent, “further job losses cannot be discounted with many businesses continuing to downsize due to the high cost environment”.
He said the Government needed to “accept its fair share of blame for the current disastrous situation” as there appears to be no plan to deal with the issue.
Richard Bruton, Fine Gael's finance spokesman said the Irish economy now faces the alarming prospect of ‘stagflation’ a "lethal combination of a stagnant economy, rising unemployment and acceleratinginflation."
He said the so-called “misery index”, the sum of inflation and unemployment rates, now stands at 10.5 per cent - the highest in over a decade.
