Bermuda's inflation rate spiked to 2.8 percent in December - the highest price increase in more than a year.

The rise in the Consumer Price Index was caused by a jump in the transport and vehicles sector, as seasonal increases in overseas travel prices and car prices rose.

The continuing rise in oil prices also drove up CPI, as the fuel and power sector rose 0.7 percent during the month as a 5.8 percent surge in the fuel adjustment clause used to set electricity prices took effect.

Most other sectors of the CPI were relatively flat.

The food and the clothing and footwear sectors were unchanged overall, rents rose by 0.1 percent, tobacco and liquor slipped by 0.1 percent, education edged up by 0.1 percent and health and personal care was unchanged, although off the shelf medicines rose by 0.2 percent and prescription medicines rose 0.1 percent.

December marked the third consecutive month that the rate of inflation has increased after several months in which it was relatively flat and was the highest it has been since November, 2001.

In 2002, the overall rate of inflation was 2.3 percent with the highest point being 2.8 percent and the lowest point being 2.0 percent in August and September.

The rate of inflation also ran ahead of the US, Bermuda's main trading partner, which recorded an inflation rate of 2.4 percent.

However, the local rate of inflation was below the UK's and Canada's which were 2.9 percent and 3.9 percent respectively.