Struggling families “simply can’t wait” until the October budget for measures addressing the soaring cost of living, the Social Democrats have warned.

Speaking to Newstalk, the party’s co-leader Róisín Shortall said things are now “really getting to a critical point” – and urged the government to call a mini-budget.

It comes after the CSO yesterday announced that inflation had hit a 38-year high.

The office said the rate of inflation for May was at 7.8% year-on-year – the largest annual increase since 1984.

Meanwhile, the European Central Bank (ECB) yesterday confirmed that it would increase interest rates by 0.25% next month – meaning homeowners with variable or tracker mortgages are facing increased payments.

The ECB also warned that another larger hike is on the cards in September.

"Critical point"

“Things are really getting to a critical point and so many families right across the country are struggling just to get by and it shouldn’t be like that,” Deputy Shortall told Newstalk. “It’s one problem after another.”

“The Government needs to take urgent action because people simply cannot wait until the October budget. We need to see a mini budget at this point.”

She said there are three main policies the Social Democrats would introduce to help struggling families.

“First, we want to see a tax credit introduced so everybody earning under €50,000 will get €300 into their pocket as a matter of urgency.

“Secondly, social welfare rates, including the pension, have not kept pace with inflation. They should have been increased by more in last October budget and there is now a crisis point for people who are on fixed incomes.

“We’re saying there needs to be an additional €10 per week for everybody on a welfare payment, just to enable them to keep their head above water.”

"Serious risk of poverty"

Thirdly she said an “emergency fund” is now desperately needed to help those who are struggling hardest.

“There are people who are going to go under as a result of these price hikes and a result of inflation,” she said.

“The government needs to set up that fund so it’s available for families who are most at risk because we know large numbers of people are going to find themselves at serious risk of poverty.

“The Government needs to act very urgently.”

The government has repeatedly ruled out the idea of a mini-budget.

Finance Minister Paschal Donohoe is due to announce the Summer Economic Statement next month.

With reporting from Alan Cantwell.