October CPI: Prices up 0.1%
Last month's consumer price index affected mainly by price hikes in clothing (6.5%) and footwear (3.9%) categories, increase in bread prices (0.8%), continued rise in rent (0.3%). Car prices down 0.4%; actual inflation rate totals 2.7%
As a result, the actual inflation rate for the past 12 months totals 2.7% - within the government's annual target range (1-3%).
The inflation trend for the past four months is much lower, amounting to an annual rate of only 0.9%. At the same time, the expected inflation for the next 12 months fell in the past month as well and now totals 2.2%.
Last month's index was mainly affected by seasonal hikes in clothing (6.5%) and footwear (3.9%) prices, as well as an increase in the prices of bread and pastry (0.8%), medications (0.9%) and rent (0.3%).
These hikes were partially compensated by reductions in the prices of tomatoes (6.8%), fresh fruit (2.8%) and cars (0.4%).
The drops in the actual and expected inflation rates, within the government's annual target range, will make it easier for the Bank of Israel to reduce the interest rate in about two weeks, in a bid to help the weakening economic activity and allow the economy to deal with the negative ramifications of the European debt crisis.
According to estimates, however, the central bank's Monetary Committee, which was recently assigned with the interest rate policy authorities, will decide to leave the key rate at 3% for another month while examining developments.
