The annual rate of inflation rose to 3.8% in April from 3.5% in March, on the back of higher mortgage interest repayments, more expensive home heating oil as well as dearer petrol and diesel prices.
The latest figures from the Central Statistics Office show that consumer prices rose a stronger than expected 0.8% in April.
The 3.8% rate is the highest since April 2003.
The CSO said that the annual rate of inflation for goods was 1.9% in April, while the corresponding rate for services was 5.3%.
Housing, water, electricity, gas and other fuel prices rose last month by 2.7% with higher average mortgage interest repayments after the introduction of higher interest rates by most of the country's financial institutions after the European Central Bank increased euro zone rates in the last few months. Home heating oil also rose last month.
In April, transport costs rose by 1.4% with higher prices for petrol and diesel as well as increases for car rental costs and bus fares. The CSO said these increases were partially offset by a decrease in air fares.
The cost of eating out and staying in hotels also rose 0.7% last month.
ISME has expressed alarm at the latest increase in inflation. ISME's CEO Mark Fielding says the rise is worrying on a number of fronts, including the fact that Irish inflation is moving further away from the European average of 2.2%.
He also said that further price increases currently being sought by Bord Gais and the ESB should be resisted at all costs.
