The Governing Council of the ECB decided today that underlying interest rates will remain unchanged.

The minimum bid rate on the main refinancing operations, the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 4.00%, 5.00% and 3.00% respectively.

Meanwhile, the latest Irish consumer price index from the Central Statistics Office has revealed that the annual rate of inflation has increased to 5% during March from 4.8% in February.

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Higher fuel costs, air fares, mortgage repayments and home heating oil prices all contributed to the increase.

In response to the CSO figures, the Director of the Small Firms Association (SFA), Patricia Callan called on the Government to make inroads in 2008 in reducing the inflation rate back to the EU target of 2%.

"In the March figures what we are clearly seeing is that businesses in the broader economy can no longer bury the cost increases that they have been experiencing over the past 18 months on their own bottom line, and now have to pass them on to the consumer in order to survive," she said.

"The fact is that unless firm action is taken by the Government now, our internationally traded sectors, on which the ultimate well-being of our economy is founded, will continue to lose international competitiveness, and we will be faced with many more announcements of job losses, both in the multinational and indigenous Irish small business sectors."

(VB/JM)