The Labour Party has said it is imperative the Dail is recalled to discuss the latest rise in the inflation figures, and to introduce a Bill to allow for an increase in social welfare rates. The increase in the consumer price index to 6.2 per cent drew strong criticism from the Opposition.

However, the Government chief whip, Mr Seamus Brennan, said the increase was not unexpected and was largely attributable to recent increases in mortgage interest rates and petrol prices. It was anticipated that the effect of these factors, driven in significant measure by external influences, would moderate and that the consumer price index would fall by the end of the year, he said.

It was very important that there is continued adherence to social partnership which, he said, was "the most effective process by which evident pressure points - especially inflation - can be surmounted".

The Fine Gael spokesman on Finance, Mr Michael Noonan, said the figure for July was the "latest instalment in the spiral" and if the average monthly figures increase for the first six months of the year continue for the remainder of the year the December figures will exceed 8 per cent.

At 6.2 per cent, he said, inflation had now more than wiped out the annual 5.5 per cent wage increase under the Programme for Prosperity and Fairness. It had also eliminated the effects of the 5 per cent increase in social welfare payments announced in the Budget. "This is quite frightening and the Government must shoulder the responsibility and take action. Up to now the Government's approach has been pathetic."

Labour TD Mr Eamonn Gilmore also said the increase was a matter of extreme concern. He said it was not beyond the Government to introduce a second finance bill to help those suffering because of inflation. Responding to the continuing rise in the cost of housing, Mr Gilmore said this was another indication of the Government's complete failure to tackle the housing crisis.

The Green Party said that, with every successive month showing expediential growth in the consumer price index figures, the credibility of the Minister for Finance and that of the fiscal and budgetary policies being followed by the Government were being totally undermined.

"What is most worrying is that inflation growth in food prices is now rising faster than the overall inflation trend, placing greatest pressure on those within society most dependent on staple goods," said the party spokesman on economic and social affairs, Cllr Dan Boyle.