The Government has said it will frame public policy to the greatest extent possible with a view to minimising inflation and keeping costs for enterprise under control.
Taoiseach Bertie Ahern, Minister for Finance Brian Cowen and Minister for Enterprise and Employment Micheál Martin yesterday met with trade union leaders and employers' representatives to discuss measures to deal with inflation which is currently running at 5 per cent.
A Government statement issued after the meeting with the Irish Congress of Trade Unions (Ictu) and employers' group Ibec did not set out specific policy measures to address inflation.
The statement said the potential for addressing the problem of workers exposed to significantly higher mortgage costs as a result of rising interest rates would be "considered further".
It said this would be done having regard to the announcement by Mr Cowen yesterday that the Budget in December would increase the ceiling of mortgage interest relief for first-time buyers from €8,000 to €10,000 for single people and from €16,000 to €20,000 for couples or widowed people.
The anti-inflation group and the high-level group on manufacturing, established under the Towards 2016 national agreement, are expected to intensify work in examining issues driving inflation, particularly in the domestic market.
The statement said the increase in inflation above expected levels derived from the impact of higher interest rates and fuel prices, both of which were outside domestic control.
"While noting that the combination of pay increases under Towards 2016 and the changes in Budget 2007 have ensured real increases for workers, the meeting acknowledged the extent to which inflationary pressures threatened the achievement of the objectives of the pay agreement," the statement added.
It said that a further meeting would be arranged involving the Taoiseach and Ministers to review the progress made in addressing the issues.
Informed sources said it was not expected that union leaders would press "at this stage" for talks on a new national pay deal, due to take place after Christmas, to be brought forward as a result of the higher than expected inflation rate.
However, this issue is likely to be debated strongly at the Ictu biennial delegate conference in Bundoran next week. Union leaders are also likely to come under pressure on this issue if the inflation rate remains at 5 per cent or goes higher over the summer.
Ibec, in its statement, said the best way to address inflation was to boost competition and increase productivity.
Ibec director Turlough O'Sullivan said: "Obviously we cannot influence external factors such as oil prices and interest rates. Nevertheless, together we can and must take steps to address those inflationary factors that are within our control."
