The Consumer Prices Index (CPI) rose 0.4% in May, the Central Bureau of Statistics reported this evening. The rise is in line with analysts' expectations. Since the beginning of the year, January-May, the CPI has risen by just 0.4%, while it has risen by 3% over the past 12 months, the upper band of the government's target.

Inflation in May was again heavily influenced by housing prices, which rose 0.9%, while the price of fresh fruit soared 10.5%. Clothing prices rose 3.6% in May, while gasoline was up 1.1%. Overseas travel cost 2% more due to the weakness of the shekel against the dollar.

Some prices did fall led by fresh vegetables which were down 4% in price in May and poultry, which also fell 4%.

As a result of the 0.4% CPI rise announced today, there is an analysts consensus that Bank of Israel Governor Prof. Stanley Fischer will leave the June interest rate unchanged at 1.5%.

Published by Globes [online], Israel business news - www.globes-online.com - on June 15, 2010

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