The rate of inflation hit a 32-year low as the cost of fuel and power continued to drop, according to the latest statistics released by Government.

The Department of Statistics' Consumer Price Index revealed that the annual inflation rate was 1.4 percent for May 2009 — the lowest it has been since February 1977.

Consumers have felt the benefit of a drastic fall in the price of crude oil, which peaked at $147 a barrel a year ago. Yesterday oil was trading at around $60.

But the price of food continued to rise — up by 6.9 percent year-over-year — while the rental sector increased by 2.1 percent.

The inflation rate was down from 1.9 percent for April 2009, having peaked for the year at 5.2 percent in January, with the average cost of goods and services falling by 0.2 percent between April and May.

On a monthly basis, food prices edged up 0.3 percent in May after the average price stalled in April, with cereals (two percent), beef (3.1 percent) and other dairy products (1.5 percent) the main contributors to the increase.

The rent sector also grew 0.1 percent, reflecting a 0.3 percent rise in rent-controlled properties, while rental units not subject to rent control were up 0.1 percent for the month.

Health and personal care advanced 2.1 percent during May in response to higher medical and heathcare services prices, with the sector climbing 6.8 percent over last year. Smokers and drinkers also found themselves paying out more as the tobacco and liquor sector rose 0.1 percent, with the average price of beer up 0.5 percent.

The household goods, services and communications sector inched up 0.2 percent for the month, largely down to a 3.5 percent boost in the price of household appliances. meanwhile fuel and power and clothing and footwear remained unchanged during May. Motorists, however, enjoyed some relief as the transport and vehicles sector declined 3.4 percent for the month, driven by a 11 percent drop in the cost of foreign travel, with travellers reaping the benefits of discounted airline tickets and hotel accommodation rates over May 2009.

The education, recreation and reading sector also contracted by 0.6 percent for the month, mainly due to an 18.1 percent fall in the average cost of toys, games and hobbies.