Food prices were unchanged, while transportation edged up and rent, power, and household supplies were slightly cheaper.

The annual rate of inflation for the 12 months that ended in March was 2.7 percent, down from 2.8 percent a month earlier.

As a country that imports 98 percent of what it consumes, Bermuda's inflation reflects the rates in the major countries with which it trades.

"At the moment, let's bask in the fact that our inflation rate is marginally lower than that of the US -- our largest trading partner,'' a Government official said.

Inflation in the US is runing at about three percent.

In the food sector, increases in the price of stewing beef, Bermuda fish, vegetable shortening, and frozen broccoli were offset by reductions in the price of butter, potatoes, and cabbage. The net result was no change, a news release from the Department of Statistics said.

Rent prices dropped 0.1 percent, fuel and power by 0.2 percent, and household appliances and services by 0.1 percent.

There was a 0.5 percent rise in the transport and vehicles sector, as new car prices continued to reflect the depreciation in the value of the dollar against the Japanese yen.

Gasoline was up 0.5 percent, and there was a 7.1 percent jump in annual insurance premiums for private cars.

Education, recreation, and reading were up 0.5 percent, reflecting higher prices for pet supplies, local newspapers, and pleasure boats.