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Cost of living up 3.2pc

The cost of living has jumped more than 3pc over the past year, official figures have revealed.

Despite moves to make Ireland a cheaper place to live and work, rising car fuel prices as well as health, home and motor insurance hikes are driving up household bills.

Increased mortgage interest repayments and higher home heating oil charges are also making it more difficult for people to make ends meet.

The latest report from the Central Statistics Office (CSO) showed a 3.2pc rise overall in the prices of consumer goods and services compared to April last year.

Prices jumped 0.4pc last month alone.

Ibec, which represents businesses and employers, pointed out that further mortgage increases would add to householder woes in the coming months but claimed inflation would ease later this year.

Fergal O'Brien, the organisation's chief economist, said planned VAT cuts on tourism-related goods and services would help slow down the overall rising cost of living.

"The focus over the coming months must remain on reducing costs across the economy and regaining competitiveness," he said.

Small business group Isme said the inflation rate was a major threat to already-struggling traders.

Isme chief executive Mark Fielding said unless the Government takes urgent action, significant job losses will result from the rising costs.

"It is ironic that in the week that we have the announcement of a jobs initiative, costs to business continue to increase, putting further pressure on enterprise," he said.

"The Government need to take the bull by the horns and address the costs under its control that negatively impact on the ability of companies to compete."

Isme has demanded reduced excise duties on business fuel, a review of commercial rates imposed by local authortities, and controversial upward-only rent clauses.

"We need a root and branch review of all business costs, in particular rates, rents, transport, energy and labour costs and a concerted Government effort to reduce them," said Mr Fielding.

"Failure to reduce costs will render the jobs initiative futile in the battle to tackle unemployment."