A business group is warning that fragile economic growth will be restricted if the government does not take action to immediately reduce costs. It follows the release of the latest Consumer Price Index which saw a rise of 0.3% in the year to November.

ISME says the inflation rate conceals the burden of rising state-influenced business costs. The group is calling in particular for the issue of upward only rents to be reviewed and a reduction in public sector costs.

"The government has dropped the ball by allowing these costs to continuously creep upwards, putting Ireland's economic revival at risk. State imposed costs, such as rates, local charges and energy are unacceptably high and must be reduced" said ISME Chief Executive, Mark Fielding.

"In the private sector the exorbitant fees of the monopolistic legal profession which ISME, the OECD and the Troika have been highlighting for some time, are continuing to add to costs. In addition, bank fees and charges have escalated and, while Government action has been called for repeatedly, very little has actually been done" he added.

ISME claims that the government is "hiding behind the fact that overall inflation is low as an excuse to ignore this important issue".