The annual rate of inflation fell for the fourth successive month in August to two percent.

But significant increases in the prices of food and electricity during the month kept the cost of living moving higher.

Those were two of the main revelations of the Consumer Price Index (CPI), published by the Government's Department of Statistics yesterday.

Consumers paid two percent more in August 2010 than they did a year earlier for the basket of goods and services included in the CPI. The rate of inflation dropped from the 2.3 percent measured in July.

Food prices jumped two percent in August — the largest monthly rise since January. Notable drivers were eggs, which rose 7.1 percent, oranges, up 6.6 percent, and frozen meals, up 5.5 percent. The CPI found that food prices were 3.4 percent higher than a year earlier.

The four percent rise in fuel and power costs was the sector's steepest monthly rise for almost two years. The main reason was the fuel adjustment rate on Belco bills, which rose by $1 to $12.50.

The cost of the fuel that Belco burns to generate electricity is influenced by the cost of crude oil, which was trading just above $83 a barrel yesterday having moved up $10 in the past eight weeks.

Year over year, the health and personal care sector was the largest contributor to inflation. Notable increases in the cost of self-prescribed medication and household medical supplies led to the 8.7 percent increase for the year.

The CPI calculated that the average cost of lawyer fees rose 23.5 percent during the month of August, while the average cost of a load of water rose 14.2 percent. These items contributed to a one percent monthly rise in the household goods, services and communications sector. Property repair and maintenance costs rose 2.1 percent, driving the rent sector 0.3 percent higher for the month and 1.7 percent higher over a 12-month period.

Transport and vehicles was the only sector to see a monthly fall in prices in August, thanks mainly to a 14.6 percent fall in air fares and a 1.1 percent fall in the cost of automobiles. Offsetting these items was the 1.8 percent rise in fuel prices.