The annual rate of inflation fell to 1.2 percent in June — its lowest point for at least 32 years — according to Government figures released yesterday.

The figure marked a slight drop from the May rate of 1.4 percent, which was the lowest rate since February 1977.

Food prices were the biggest driver of the rise in the cost of living, climbing 5.2 percent from a year earlier, the Consumer Price Index revealed.

But rents recorded their first monthly fall in years, dipping by 0.1 percent from May to June, driven by a 0.3 percent decline in rents for non rent-controlled properties. However, rents were still two percent higher than they were 12 months before.

The fall in crude oil prices from last summer's all-time high of more than $147 a barrel was one reason why consumers paid 10 percent less in June than a year earlier in transport and vehicles expenses. And fuel and power prices were also 0.6 percent lower, year on year.

While food prices were higher than last year, they actually fell by 0.1 percent from May, thanks mainly to falls in the price of local fish (-3.2 percent) imported block cheese (-9.1 percent) and imported eggs (-5.3 percent).

There was no change in the fuel and power sector for the second successive month, as Belco's fuel adjustment charge remained unchanged.

Gasoline prices rose more than four percent between May and June, resulting in a rise of 0.3 percent in transport and vehicles costs.

Clothing and footwear prices were up 1.4 percent year on year, but unchanged from May, while health and personal care costs were up 6.6 percent on last year.

Bermuda's June inflation rate compared to 0.9 percent in the US, -0.3 percent in Canada and -1.6 percent in the UK.

The basket of goods and services used to calculate the CPI, which cost $100 in April 2006, now costs $110.50.