Minister of Finance Eugene Cox last night welcomed news that the inflation rate had lowered to two percent in August this year.

He said the rate of inflation in July was marked at 2.3 percent, but by August it had crept down to a more favourable two percent - the lowest since February 1999.

The Minister released the statement after the consumer price index was released yesterday.

He said: "I think that this is excellent news coming on the back of the recent news of the improvement in Bermuda's balance of payments position, which is now in surplus for the year to date.

"The stable level of price inflation is another positive sign of Bermuda's strong economic fundamentals.

"Government expects that prices will remain relatively stable for the remainder of this year, and, if oil prices stay in check, the outlook for continued price stability in 2003 is positive."

The most recent inflation figures of two percent were the lowest since February 1999.

The August rate was below the July figure of 2.3 percent with fuel and power falling by 0.8 percent.

Food edged slightly up with fresh carrots going up by 13.7 percent according to the Consumer Price Index compiled by Government. But this was questioned by the supermarkets.

Both Supermart and The MarketPlace said their prices had not risen during that period.

MarketPlace Vice President Scott Carswell said the supplier and retail costs for carrots had also not changed in that period.

And Supermart general manager Tredick Gorham said: "Nothing has changed here."

Government statistics also showed prices for imported potatoes rose 9.1 percent, cabbage was up 6.8 percent, cantaloupes up 4.4 percent, English marmalade up 2.9 percent and Kellogg's corn flakes up 2.8 percent.

Rent remained unchanged, as did clothing, footwear, tobacco and liquor, while household goods, services and supplies showed a tiny increase.