Despite a slow down in price increases many workers are losing out as inflation exceeds pay rises.
Inflation for the first six months of the year has been at an average of five per cent. Pay increases under the National Wage Agreement are 4.4 per cent. Last month, prices continued to increase but at a slower rate.
In real terms, many workers are losing out.
Summer sales served to reduce the price of footwear and clothing in the inflation figures. However, in reality inflation remains high largely down to high interest rates. Even when interest rates are stripped out of the inflation rates, inflation is at 2.7 per cent, around one per cent higher than countries using the euro.
There have been calls for government to tackle costs that it can control. Mark Fielding, ISME Business Group, points to increasing public service costs which have to paid by the tax payer. Fergal O'Brien economist at IBEC says that all workers are doing much better given the tax cuts and mortgage interest relief that have been introduced.
Tánaiste and Minister for Finance Brian Cowen says that more competition is needed in the economy to give people the best possible value for money.
With high inflation the euro has now hit an all time high against the dollar making exports more expensive. However, new figures show that there has been healthy growth in manufacturing in recent months. The challenge remains keeping costs down.
An RTÉ News report broadcast on 12 July 2007. The reporter is David Murphy.