Inflation continued above four percent for the third month running, according to the latest statistics released by Government.

The rate of inflation hit 4.3 percent in July, following figures of 4.5 percent and four percent for May and June respectively as inflation peaked at a 16-year high.

Overall inflation has increased by more than half from 2.8 percent at the start of 2007, compared to July's second highest total of the year.

Finance Minister Paula Cox attributed this to price pressures in the overseas energy markets and the weakness of the US dollar, allied to the fact that the Ministry of Finance indicated in its 2007/08 national Budget statement that the outlook for inflation would depend very much upon oil prices.

Ms Cox said: "The Ministry of Finance continues to monitor Bermuda's rate of inflation.

"Sustained pressures in world oil markets and the continued weakness of the US dollar against most currencies, including source countries for many of Bermuda's imports, have combined to keep the headline inflation rate above four per cent.

"However, the underlying 12-month trend rate in July was 3.6 per cent.

"If this trend rate holds through the balance of the year, then the average inflation rate could remain under 4 per cent for 2007. The average inflation rate in 2004 was 3.6 per cent and it fell back to 3.1 per cent in 2005 and 2006."

And she pointed out that the UK has experienced similar inflationary problems.

"I note that the UK is experiencing similar pressures in its rate of inflation with the headline rate moving up to 3.8 per cent in July 2007 from an average of 3.2 per cent in 2006."

The all-items index rose from 104.6 index points in June to 104.9 points in July, meaning that the basket of goods and services that cost $100 in April 2006 now cost $104.90.

The transport and vehicles sector was the main contributor to the 12-month increase in the Consumer Price Index, while the rent and health and personal care sectors also impacted strongly on the annual rate of inflation.

Upward pressure in the world oil markets resulted in a 2.2 percent rise in premium and mixed blend gasoline prices in July, with overseas travel costs leading to gains in the transport and vehicle sector.

Meanwhile the rate of price increase for the health and personal care and rent sectors were 6.8 percent and 2.6 percent respectively.

Looked at on a month-to-month basis, the rent sector climbed 0.2 percent due to a 0.4 percent rise in rent-controlled properties, while rental units not subject to rent control moved ahead 0.1 percent for the month.

Elsewhere, higher gasoline prices contributed to an increase in the transport and vehicles sector, as foreign travel costs of 2.2 percent including airfares and hotel accommodation helping to push up the sector in July.

On average, food prices declined 0.2 percent in July, with the decrease being largely attributed to a drop in the cost of frozen lamb chops (-4.7 percent), fresh and frozen turkey (-2.7 percent) and bananas (-2.3 percent).

Moving in the other direction, the clothing and footwear section rose 2.3 percent in July, with an upward movement in the average cost for women's (1.3 percent) and men's (0.4 percent) clothing the main contributor to the increase.

Household goods, services and communications were also on the move, edging up 0.1 percent in line with a 0.8 percent increase in household supplies, with the cost of funeral services also significantly effecting the overall rise by advancing four percent.

The fuel and power sector, similarly enjoyed a rise of 1.9 percent, due to higher electricity costs as the fuel adjustment clause climbed by four percent.

Of the sectors to remain unaffected, were tobacco and liquor, the education, recreation and reading and health and personal care.