The annual inflation rate dipped to 1.8 per cent in June, down from 2.4 per cent the month before.

The main driver in the increased cost of living was the fuel and power sector, which climbed 11.2 per cent from the year before.

This increase was mainly the result of increases in the fuel adjustment rate on Belco bills, which rose 10.5 per cent in June from the previous month, thanks to an increase in the price of the fuel that the utility burns to generate power.

The Consumer Price Index, published today by the Department of Statistics, also showed that transport and foreign travel sector prices rose 3.2 per cent from a year earlier, while food sector prices rose 2.7 per cent.

In the month-to-month price changes, food prices climbed 0.6 per cent from May. Fuelling the increase were price rises for cantaloupes (up 7.6 per cent), peanut butter (up 3.7 per cent) and apples (up 1.1 per cent).

Prices in the transport and foreign travel sector fell 1.2 per cent in June from the month before, as the average cost of overseas hotels plunged by 9.5 per cent and the cost of premium fuels fell by 4.9 per cent.

The basket of goods and services measured by the CPI that cost $100 in April 2015 cost $103.30 in June.