THE speed at which prices were rising in Hong Hong slowed last month, but the
Housing costs continued to be the major component in the rise in the cost of living, but the Government said cheaper food items reduced the overall figure.
Despite high interest rates - which normally bear down on inflation - and higher unemployment, lower retail sales and a sluggish property market, the benchmark measure of inflation, Consumer Price Index (CPI) (A), moderated slightly to 9.1 per cent from 9.6 per cent in April.
Last month the Government raised its forecast for inflation this year from 8.5 per cent to nine per cent, but for the first five months of this year the rate of price increase has averaged 9.4 per cent.
The other measures of inflation are also above the Government's forecasts.
CPI (B), which covers the next band of households as measured by expenditure, increased 9.5 per cent last month, slowing from 9.9 per cent in April, while the Hang Seng CPI, which measures the wealthier households in the territory, slowed from 9.8 per cent to 9.5 per cent.
The Composite CPI rate, which covers households measured in the territory, slowed by half a percentage point to 9.3 per cent.
While the indexes recorded a slower rate of increase, some of the individual components continued to accelerate.
Despite the continued fall in the underlying prices of property coming on to the market, there is little sign in the government figures of rental demands moderating.
Driven by new tenancy agreements, the cost of housing last month was 12.4 per cent above that in the same month last year, when measured by CPI (A).
At the upper end of the market, the Hang Seng CPI showed the cost of housing rising at 12.8 per cent.
The cost of services continued to rise faster than the average level of inflation, increasing 10.3 per cent in the Composite CPI.
There were also above average increases in the costs of clothing and footwear although the Government said the rate of increase for these items was slowing.