The annual rate of inflation rose to 3.9 per cent in May as businesses and consumers felt the effects of higher energy prices.
The escalating price of electricity, gas and other fuels was the main culprit for the rise in consumer prices as households faced higher bills and shops passed on higher costs to consumers. The corresponding figure for last month was 3.8 per cent.
The Central Statistics Office's Consumer Price Index (CPI) showed average mortgage repayments have risen by 25 per cent in the past 12 months. The cost of natural gas has also gone up by 25 per cent while the cost of home heating oil has risen by 23 per cent.
The index also shows that the cost of petrol is now 16 per cent higher than it was this time last year.
The rise in the price of electricity, gas and other fuels is the main driver of rising inflation.
The CPI shows that prices rose in restaurants and hotels, with higher prices for accommodation, drinking out and eating out.
Food prices have risen considerably in recent months, with many commentators expressing disappointment that the repeal of the Groceries Order has so far failed to lower prices.
However a detailed breakdown of the food category shows that the sharpest rises in food prices occurred in products such as fresh meat and vegetables, which were never covered by the Order.
Since April the largest price increases were recorded for lamb (+7.7 per cent), pork (+5.8 per cent), bacon (+1.9 per cent), cakes (+1.9 per cent), and other fresh vegetables (+1.6 per cent).
Over the past 12 months energy prices have risen by 14 per cent, transport costs have risen by 4.8 per cent, and education by 4.7 per cent. The annual rate of inflation for goods was 2.6 per cent in May; the corresponding rate for services was 5.1 per cent.
However three categories are still experiencing price falls. Clothing and footwear (-1.9 per cent), furnishing (-0.9 per cent) and communications (-0.6 per cent) have fallen over the past twelve months.
Fine Gael Deputy Leader & Finance Spokesman Richard Bruton said the acceleration in consumer prices is a serious concern and he insisted the rest of Europe is not being affected on the same scale.
"This is a very serious deterioration in the competitiveness of the goods & services on offer to Irish consumers," he said. "The rising cost of housing is clearly putting a major strain on consumers, particularly young families. Mortgage interest has risen by 25 per cent in the past 12 months, and the increased ECB rate will push it up to a staggering 33 per cent.
"The Government is failing to keep down costs in sectors which it controls directly. It is also failing to create a competitive environment in sectors where it plays a role as regulator. We need a stronger pro-consumer policy to protect families from unjustified price rises," he added.
Kathleen Lynch, Labour's spokeswoman on consumer affairs, said Ireland has the fifth highest inflation rate in the eurozone.
"Accommodation costs in Ireland rose by 3.6 per cent in the last month and by 9.3 per cet in the last 12 months. Once again, we have to ask why prices in the domestic tourism sector have risen so rapidly, and what Government is doing about it," she said.
"With the Ryder Cup approaching, it is vital that Ireland does not do further damage to its reputation as a tourism destination, by allowing price hikes in the hotels and accommodation sector."
Green Party Finance spokesperson Dan Boyle said the threat of a 5 per cent rate of inflation is looming on the horizon.
"The inflation rate has now reached a level from which the Government cannot hide or ignore," he said. "After several months of increases in the rate of inflation there is nothing to indicate that this trend will reverse in the near future and it is now possible that Ireland will face a five per cent rate of inflation."