Consumer prices rose 2.4 per cent year on year last month, compared with February's 0.8 per cent and January's 2 per cent, the government said. The fluctuations over the first quarter are a result of the waiver of public housing rents by the Housing Authority and Housing Society for February. A government spokesman said inflation remained moderate last month. 'Netting out the effect of the waiver, the rate of consumer price inflation in March was actually similar to that in the preceding two months combined,' the spokesman said. 'Increasing price pressures from the external front are expected, given the recent weakening of the US dollar. Nevertheless, overall inflationary pressures should be cushioned to some extent by the continued distinct growth in labour productivity. Furthermore, the budget's measure of a rates waiver for two quarters and other one-off factors will also help to keep the headline inflation down in the coming months.' Financial Secretary Henry Tang Ying-yen announced a number of tax relief measures in his budget in February. However, rising wages, the stronger yuan and rising household wealth thanks to the recent rise in the stock market could push up prices. The Census and Statistics Department said February inflation would have been 3.1 per cent without the rate waiver, meaning inflation for the first two months of the year would have been 2.5 per cent. Last month, food prices - excluding meals bought away from home - rose the most, at 5.2 per cent, followed by housing (4.5 per cent) and clothing and footwear (4.4 per cent). Falling prices were recorded for durable goods (5.7 per cent) and alcoholic drinks and tobacco (3.8 per cent). Electricity, gas and water charges fell 1.5 per cent, and transport costs 0.8 per cent. Hang Seng Bank economist Vincent Kwan Wing-shing said inflation could creep close to 3 per cent by the end of the year but should still average around 2.5 per cent for 2007.