Prices continued to rise in April, as the rate of inflation increased to a 30-month high of 3.2 per cent over the year.

However, most of the factors driving proces higher are outside Ireland's control, analysts said.

Higher mortgage interest and rising oil prices put further pressure on consumers as the European Central Bank increased its rates from a record low, and unrest in the Middle East continued to impact commodity prices. 

The Consumer Price Index (CPI) showed the cost of housing, water and fuels rose by 11.8 per cent over the year, while the cost of communications was up 4.1 per cent. Health costs increased by a similar amount.

However, prices for clothing and footwear were down 2 per cent on average over the year, while education costs slipped 1.2 per cent.

"We view the increase in headline inflation as transitory," said Goodbody economist Juliet Tennent. "Given the weak domestic environment, particularly in relation to the labour market where wage inflation is unlikely, we view the increase as transitory. Nevertheless, the rise in headline inflation in the short-term does reduce consumers' discretionary income."

The EU Harmonised Index of Consumer Prices (HICP), which excludes certain items such as mortgage interest, showed inflation of 1.5 per cent.

On a monthly basis, inflation according to the CPI was 0.4 per cent higher. This was fuelled by a 1 per cent hike in transport costs, and a 0.9 per cent rise in the cost of housing and fuel. Home heating oil was up 2.5 per cent, while mortgage interest increased by 1.4 per cent.

The HICP recorded a monthly rise of 0.3 per cent in the month.

Business group Isme said the rise in annual inflation was "deeply worrying" and said job losses would continue unless the Government takes action to deal with business costs that are under State control.

"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," said Isme chief executive Mark Fielding.

"While we acknowledge that some efforts were made to address business costs, the reality is that they are a mere drop in the ocean compared to what is urgently required."