The Department of Finance has said that it told employers and unions at a briefing this afternoon that it expects inflation for 2008 to average 4.3%.
However, union sources insist that Department officials told them that the figure could be 4.5%.
They expect inflation to fall in the latter part of the year, bringing down the annual average.
A department spokesperson said the 4.5% figure related to the average of estimates from a range of economists.
He said that the Department would not be issuing any further inflation estimates ahead of the Budget.
The next inflation statistics are due out on Thursday.
The inflation figure is crucial for both employers and unions in trying to fix an appropriate pay increase if a new national wage agreement it to be reached.
Employers warn over union recognition
Employers earlier warned that future investment by multinational companies could disappear with many job losses if they were forced to recognise unions.
Speaking as he arrived for the pay talks at Government Buildings, IBEC Director General Turlough O'Sullivan said employers had told anyone who would listen for some time that they could not concede anything remotely approaching statutory union recognition.
He said Ireland has a huge constituency of multinational companies that we need to hold onto.
He said the current position whereby companies are not obliged to negotiate with unions was the only competitive advantage we have.
He warned that if that were given away, Ireland will effectively be saying goodbye to future investment in that sector - so employers will not to be agreeing to anything significant in that area.
However, the head of the Private Sector Committee of ICTU, Jerry Shanahan, warned that better negotiating rights for unions were a deal breaker for securing a new pay agreement.
He said Government would have to legislate to replace the negotiating processes which the Supreme Court had rendered inoperable in the Ryanair ruling.
Five days of talks scheduled
Representatives of the Government, unions and employers are attending the discussions which began yesterday and are due to last five days.
A range of non-pay issues were due to be discussed today including collective bargaining, pensions, agency workers and modernisation in the public sector.
Differences have already emerged between unions seeking protection for low paid workers, and employers who say a separate pay agreement in their favour is not credible.
IBEC believes that current economic difficulties have left no room for wage increases in the public sector but unions insist their members need to be compensated for cost of living increases.
Taoiseach Brian Cowen has said the changed economic circumstances must be taken into account.
Figures released last week showed a record 74,000 increase in the dole queues during August, the highest in 10 years.
Minister for Finance Brian Lenihan is currently compiling his Budget which has been fast-forwarded almost two months to 14 October as a €5bn deficit opens up in the public finances.
The pay talks were suspended without agreement last month after failing to meet the 1 August deadline.
Mr Cowen has told the social partners that he is ready to intervene in the negotiations if he is needed.
On Friday, IBEC proposed a pay pause for a minimum of one year in the public sector and six months in the private sector.
The employers' body warned that a 1% increase in pay would cost the taxpayer about €180m a year.
Efforts will continue today to identify issues and find common ground before full negotiating begins.
