Government Ministers have been ordered by the Taoiseach to identify measures to curb inflation, as figures to be published tomorrow are expected to show annualised inflation for the period to the end of June running at above 5.5 per cent.
In one major anti-inflation offensive, the Minister for Health, Mr Martin, has vetoed a plan by the VHI to increase its subscriptions rate by 9 per cent from September.
Mr Martin is also to meet doctors on Wednesday to ask them to introduce a price freeze on private fees, while the Minister for Justice, Mr O'Donoghue, is expected to discuss fees and "social responsibility" with the Law Society on Wednesday.
The Minister of State for consumer affairs, Mr Tom Kitt, is to ask representatives of the retail trade this week to play their part in tackling inflation, while the Minister of State at the Department of the Environment, Mr Robert Molloy, is to bring proposals to Government to deal with rent control, as part of the effort to reverse inflation.
The Government has also promised that public bodies will not raise prices over the remainder of the year.
It has been learned that Mr Ahern told Ministers at last week's Cabinet meeting to meet directly with professional bodies to impress upon them the need to curb fees. He made the request two weeks ago but was reported to have been annoyed that meetings had been set up with officials rather than directly with Ministers.
A spokesman for Mr Martin confirmed last night that the Minister wrote to the VHI on Friday rejecting the fee-increase application and asking the company to submit a revised business plan for next year. While the latest rate may be under the 6 per cent predicted, inflation is expected to be close to that level when the next set of figures is published in four weeks. Increasing oil prices, rising mortgage repayments and food-price increases are likely to contribute to the rise.
Mr Austen Hughes, an economist at Irish Intercontinental Bank, is predicting that tomorrow's figures will show the annual inflation rate likely to rise to 5.5 per cent. This tallies with the estimate of Mr Jim Power, chief economist at Bank of Ireland.
The news will come a day before a meeting of the ICTU's council ahead of an implementation review of the partnership agreement on July 27th. SIPTU has called for increased tax credits to be examined in the context of the next Budget, and changes in indirect taxation will also be part of the coming Budget negotiations between the social partners.
According to Mr Power, inflation will peak at 6.5 per cent in September, before gradually falling back to 5.5 per cent by December. That would leave the average for the year at more than 5 per cent, completely eliminating the benefits of wage rises under PPF. That estimate is likely to be part of the Department of Finance's Economic Review And Outlook to be published at the end of the month.
In the figures to be released tomorrow, the CSO measured prices being charged on June 13th. It is unclear, for example, how many garages had passed on fuel price rises by that date. Mortgage rises implemented since mid-June would also not be included. Prices for fresh foods such as potatoes are also notoriously difficult to estimate accurately.
A spokeswoman for the VHI said last night they understand the pressures surrounding inflation and were quite happy to discuss with the Department of Health how to address it.