years, the Government revealed this week.

However, the Finance Minister the Hon. David Saul warned against linking Island prices or wages to inflation saying people should not price themselves out of a job.

Ministry figures show that inflation rose by almost one percent to 3.2 percent in June, compared with 2.3 percent in May.

Dr. Saul says the increase was driven by a one-off jump in the price of a few items, notably cars and motorbikes caused by the strength of the Japanese Yen making it more expensive to buy their goods in dollars.

Essentially, the rise in inflation was caused by increased costs of buying imported items.

"It does not represent a generalised increase in inflation and it would be most inappropriate for other price and wage setters to see it as a cue for matching price increases,'' said Dr. Saul.

During the month, car prices rose by seven percent and bike prices by 3.2 percent but Dr. Saul said increases in other sectors remained subdued.

Clothing and footwear have risen by just 1.3 percent over the whole year and health and personal care costs rose by 0.1 percent. Rental payments, which have a huge influence on the rate of inflation, increased by 1.6 percent.

"The rise in inflation is largely a reflection of an unavoidable one-off increase in the price of Yen-dominated goods,'' said Dr. Saul.

"Since June the Yen has been steadily weakening against the Dollar and we can therefore be confident that such a large one-off increase in prices will not be repeated.

"Everyone must recognise the responsibility to ensure that firms do not price themselves out of an evermore competitive world market place and that workers do not price themselves out of a job.'' Last night Mr. Bobby Rego, president of the Chamber of Commerce, said he believed the increase had had no noticeable effect on his members and agreed with Dr. Saul saying prices of cars and bikes would drop as the strength of the Yen fell.

"I only start to get jumpy if there are increases in inflation over two or three months. Let's hope that Dr. Saul is right.''