Bermuda's rate of inflation dropped below four percent for only the second time in eight months during the month of December 2007, according to the latest statistics released by Government.

The Department of Statistics' Consumer Price Index (CPI) report revealed that the rate abated from the 19-year high of 4.8 percent recorded in November 2007 to 3.6 percent for December last year.

Meanwhile, between the two months, the average cost of goods and services in the CPI decelerated by 0.5 percent.

The fuel and power sector was the largest contributor to the 12-month increase in the CPI, with the higher average cost of electricity due in part to a 51-percent increase in the fuel adjustment clause. As a result, the annual rate of price rise for this sector climbed by 28 percent.

The rent and health and personal care sectors also impacted strongly on the annual rate of inflation, as the reported increases in these sectors were 1.9 percent and 6.6 percent respectively.

But, reversing the trend of rises, was the transport and vehicles sector, which saw gas prices dip from the all-time high set in November as the premium and mixed blends fell 4.2 percent and four percent respectively. In addition, the average cost of foreign-travel which includes both airfare and hotel accommodation also declined for the month.

On average, food prices also dropped 0.7 percent in December, with potatoes (-8.8 percent), eggs (-4.2 percent) and cheddar cheese (-1.5 percent) the main contributors.

Also on the increase, however, were the education, recreation and reading sector, which reported a 10-cent increase in the price of local newspapers to advance as a whole by 0.1 percent for the month.

Elsewhere, the tobacco and liquor sector rose 1.1 percent, reflecting an increase in the price of beer, which was up by 4.4 percent.

The household goods, services sector and communications remained unchanged.