The Central Bureau of Statistics published the Consumer Price Index (CPI) for October this evening. The index rose by 0.1%, which was slightly lower than expected, as analysts had predicted a 0.2% rise. However, there was a major surprise, when the Central Bureau of Statistics also reported that the price of homes, not included in the CPI, fell by 0.2% in October - the first such fall in three years. There was also a 0.5% fall in housing costs which are included in the CPI.
In the first 10 months of 2011 the CPI rose by 2.3% in the middle of the government's target range for inflation. In September, the CPI fell by 0.2% following the social protests in the summer.
Clothing was responsible for the largest price rise in October as winter collections came into the stores. Food prices rose by 0.3% in October as the summer's social protest faded. Cereal and baking products rose by 0.8% in October, milk by 1% and ice cream by 3.5%.
Looking ahead to the Bank of Israel's interest rate call on November 28, a survey by "Bloomberg" found analysts split with five expecting the rate to remain at 3% and five expecting it to be lowered by 25 basis points to 2.75%.
The fall in home prices in October is in line with recent figures published by the Ministry of Finance and the Government Assessor, and while the data represents only one month, it does suggest a change in the situation in the housing market.
Published by Globes, Israel business news - www.globes-online.com - on November 15, 2011
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