Fuelled by a surge in the price of oil, the annual rate of inflation inched higher to two percent for June, from 1.9 percent for the 12 months to the end of May.

The May 1.9 percent figure inflation rate for Bermuda was believed to be an all time low, since figures were first kept 30 years ago.

The government's statistical department said that in monthly terms, households experienced an average price rise of one half of one percent in the cost of goods and services between May and June, as the all-items index reached 105.9.

Statistical officer, Loren Bell said the all items index covers a wide range of prices of goods and services that make up the basket of the Consumer Price Index (CPI).

She said, "The index is measured price movement of a given quality or quantity of goods and services that are included in the shopping basket for the CPI. The shopping basket represents a mixture of the consumer products purchased by the average household. That mixture was determined by the household expenditure that was done in 1993.'' The strongest monthly change in prices was a 2.1 percent increase in the Fuel & Power sector, which represents 3.3 percent of the index. Consumers paid more for electricity (up 2.3 percent), as the fuel adjustment portion of electricity charges increased for the first time this year.

Economic statistician Valerie James-Robinson said, "The fuel adjustment clause has been declining since the beginning of the year, January. This was the first time since the beginning of the year that it increased. The earlier decline, was in fact, the determining factor in May for the drop in the CPI to 1.9 percent. And, the subsequent increase in the Belco fuel adjustment clause was what caused the slight increase in the CPI for June.

"There were a number of developments that caused the price of fuel oil to decline during the early part of the year, and now it is returning back to normal.'' But householders also spent less for a cylinder of propane gas, with the average price falling 1.2 percent during the month.

Food prices rose by an average of 0.8 percent, reflecting a 2.8 percent increase in the cost of food purchased from restaurants and cafes.

The Household, Goods, Services & Supplies sector advanced 0.7 percent, due primarily to an increase in the household services component. The average cost of funeral services, lawyer fees and residential care services for the elderly collectively increased 1.1 percent in June 1997.

Transport & Vehicles registered a 0.6 percent monthly increase. Both car and motorcycle prices increased an average of 0.1 percent and 0.6 percent, respectively. There was also a 3.2 percent upward move in airline ticket fares to selected destinations.

The Rent sector, worth 27.6 percent of the index, increased 0.1 percent, while health & personal care was up 0.4 percent. On the other hand, Education, Recreation & Reading contracted 0.3 percent. Clothing & Footwear and Tobacco & Liquor remained unchanged.

BUSINESS BUC