Bermuda's inflation rate is still running high - coming in at 3.4 percent for the month of October, according to Government figures released yesterday.

Although down from September, when it reached a 12-year high of 3.8 percent, the rate is still well above the rates in the US, Canada and the UK.

This brings the average rate of inflation so far for 2003 to 3.22 percent, above the Minister of Finance forecasts used to set work out the budget for the rest of the year - which he pegged at three percent.

In October, inflation in Europe was 1.8 percent, the US two percent, Canada 1.8 percent and in 1.4 in the UK in September.

When the September figures came out the Government of Bermuda downplayed concerns about inflation reaching 3.8 percent, stating that the worries about the economy were not justified and presented a "distorted picture of the situation" and there was "no cause for alarm".

And it said, through a release, that visitors would not stop coming to Bermuda because prices in stores or hotel prices "may be slightly higher than they are in other destinations".

The Government release said of worries reported in The Royal Gazette about the high rates of inflation: "Unfortunately, that interpretation presents a distorted picture of the actual situation and creates worries that are not justified. Of course, a 3.8 percent inflation rate - if it were to persist - would be troublesome. But a careful assessment of the factors behind the rise shows that - while the increase should be noted - there is no cause for alarm."

In OCtober. every sector, bar fuel and power, edged up by less than two percent, but the overall rise in costs pushed up the cost of living in Bermuda year over year.

The cost of fuel and power dropped by 3.2 percent, reducing the rate of inflation from September when it reached 3.8 percent.

The average cost of electricity in Bermuda fell by 3.5 percent as the price of fossil fuels around the world stabilised and pushed down the fuel adjustment clause by 20.5 percent which led to the cost of power being cut in Bermuda.

The food index edged up 0.1 percent during October. Price hikes included roast beef and strip loin, up 3.8 percent, imported cod, up 3.6 percent, stewing beef, up 2.2 percent, baked beans up 3.4 percent, pasta up 2.8 percent and eggs up 1.4 percent. But the cost of some products fell: wahoo down 3.5 percent, pork loin down 3.3 percent, imported potatoes down 4.7 percent, coffee down 2.1 percent and canned fruit down 0.9 percent.

The rent index once again edged up, rising 0.1 percent in October as the average rental costs for controlled property increased by 0.2 percent, but this was stabilised by non-rent controlled properties which stayed unchanged.

The cost of clothing and footwear rose by 0.1 percent with consumers paying 1.6 percent more for dry cleaning services.

Tobacco and liquor costs rose by 0.2 percent due primarily to a 1.1 percent increase in the average cost of wine.

The average prices in the household goods, services and supplies sector rose by 0.3 percent during the month, pushed up by the cost of bedroom furnishing and floor coverings up by 3.1 and 11 percent respectively.

There were also rises in the cost of writing materials, up 0.6 percent and detergents and bleaches up 0.1 percent, but these were partially offset by a fall in the price of food wraps and trash bags, down 0.5 percent and other miscellaneous items.

The transport and vehicles sector rose 1.5 percent in October, attributed to both a seasonal increase in the cost of both air travel, up 3.5 percent and overseas hotel accommodations, up 4 percent. The price of petrol fell for the third consecutive month as the average cost of premium and mixed fuel fell by 1.1 percent and 1 percent respectively.

Education, recreation and reading costs rose by 0.1 percent in October 2003 and the average cost of pet care rose by 1.1 percent while the average price of cassette tapes and compact discs increased by 1.3 percent.

The health and personal care index edged up by 0.5 percent during the month. Average fees for eye care, dentist and doctor exams rose by 3, 4.2 and 0.8 percent respectively. Additionally households spent more for self-prescribed medicines, up 0.2 percent, and toiletries, up 0.1 percent.