Inflation hit 3.4 percent in May ? its highest point so far this year? figures released yesterday by Government showed.

The Consumer Price Index (CPI), compiled monthly by the Statistics Department, partly put blame for the high rate of inflation on an increase in fuel costs as the price of premium and mixed fuel rose 6.6 and 6.3 percent, respectively.

The rate of inflation standing at 3.4 percent in May continued a trend of Bermuda's level of inflation being above three percent. On average, the rate of inflation for the past 12 months stands at 3.27 percent with every month since April 2003 recording a level of inflation above three percent.

The lowest rate during the past year was in January when it stood at three percent and the highest was in September last year, when inflation reached 3.8 percent.

The Island's rate of inflation has also been well ahead of CPI measurements in other countries such as the UK (1.5 percent), US (1.2 percent), Canada (0.7 percent March) and Europe, where rates in previous months have been varying from 1.4 percent in Finland to 2.9 percent in Greece.

According to Government data this week, the transport and vehicles index posted the strongest monthly price movement with an increase of 1.4 percent. This was on the back of consumers paying out more at the gas pump as world oil prices soared.

The fuel and power sector also rose by 0.8 percent in response to a 5.7 percent increase in the fuel adjustment clause which meant electricity costs were 0.9 percent higher during the month of May.

Increases in hotel and airfare rates also bore on the overall rise in the cost of goods with consumers paying out 0.8 percent and 0.7 percent more, respectively.

Food prices were marginally higher with an overall increase of 0.2 percent. Broken down by item, the price of frozen lamb leg was up 5.6 percent, pork loin, up 5.3 percent, cucumbers, up five percent, salt, up four percent, lettuce, up 3.9 percent, lamb chops, up three percent and the cost of strip loin beef steak rose 2.9 percent.

The cost of rent was up slightly with the index recording a 0.1 percent increase. On average the rental costs went up in controlled properties by 0.2 percent while rates in the noncontrolled sector remained static.

There was no price movement recorded in the clothing and footwear sectors, nor were there any changes in the average price of tobacco and liquor items.

The cost for other goods included in the consumer basket of goods that make up the index also saw marginal increases including a 0.1 percent rise in the cost of household goods, services and supplies.

In particular the average cost of appliances rose 0.5 percent while the cost of electronics was also higher with stereo systems rising 4.4 percent and computer printers costing 1.6 percent more.

Costs recorded in the education, recreation and reading sector also edged up 0.2 percent month on month, primarily because households spent out 2.2 percent more on pet care and 1.2 percent more on sporting fees.

Health and personal care items were fractionally more expensive, with an increase of 0.1 percent as the cost of self-prescribed medicines and personal care items rose 0.3 percent.