The Government will agree measures to attempt to deal with inflation at a Cabinet meeting tomorrow. The imposition of price controls and measures to increase competition in certain sectors are among moves being considered.
Ministers have been considering imposing maximum-price orders on drinks sold in pubs and in other sectors where they believe there is excessive "profit-taking".
Measures to increase competition in certain sectors are also on the table, including possible further modest liberalisation of the restrictions on the opening of new pubs, particularly in the Dublin area.
Ministers will also consider removal of the Groceries Order under which supermarkets cannot charge below certain minimum prices for certain goods such as bread and milk.
The Taoiseach and senior officials have met trade unions and employers to discuss how to deal with rising inflation, amid trade union warnings that they may not honour the terms of the Programme for Prosperity and Fairness unless inflation is brought under control.
Union leaders fear that rising prices will erode the value of pay rises agreed under the social partnership deal.
The Taoiseach conceded last week that inflation would move even higher than the 5.2 per cent recorded for the year to May. However, he says he believes it will level off after six months and may then begin to fall back.
Ireland now has the highest recorded inflation rate in Europe, and the European Commission has warned that the Government must take fiscal measures to control the rise. The measures announced tomorrow are likely to be designed to have a short-term effect.
Measures advocated by the Commission and economists include the postponement of tax cuts promised for the next budget.