The Consumer Price Index (CPI) rose by 1.1% in July, in line with market estimates, the Central Bureau of Statistics reported today. This makes year-to-date inflation 3.2%, and inflation for the twelve months to the end of July 3.5%, above the government’s price stability target range of 1-3%.
The biggest contributor to the July inflation figure was water charges, which rose 26.7%, in the wake of the drought levy the government imposed in the 2009-2010 budget.
The leisure and recreation item rose 11.3%, contributing substantially to the rise in the general index. Other notable rises were in vehicle oils and fuels (3.4%) and fresh produce (8.4%). On the other hand, the housing item rose just 0.4%, compared with projections of a 2% rise.
Automobile insurance fell, as did prices of furniture and of clothing and footwear (-5%), because of summer sales.
Despite warnings that the CPI might surprise with a sharp rise in July, the figure, as mentioned, is in line with estimates, and therefore no change is expected in the Bank of Israel’s interest rate policy.
Published by Globes [online], Israel business news - www.globes.co.il - on August 14, 2009
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