Surging food and utility bills in Hong Kong spark inflation warning as prices rise 1.7 per cent

Officials have warned that inflationary pressure is rising as new figures reveal the cost of living in Hong Kong continues to increase, driven by higher utility bills and more expensive fresh vegetables.

The overall consumer price index (CPI) recorded inflation of 1.7 per cent in October year on year, according to Census and Statistics Department data published on Monday. That compares with 1.4 per cent for September and 1.6 per cent in August.

A government spokesman said that October saw “more visible year-on-year increases” in prices across a range of products, with clothing and footwear climbing 6.1 per cent and food bills up 2.2 per cent. Electricity, gas and water charges soared 28.1 per cent while transport costs went up 5.7 per cent.

“Looking ahead, inflation pressure may go up somewhat in the near term alongside the faster increase in import prices and the economic recovery,” the spokesman said.

“Yet, underlying inflation should remain largely in check as domestic cost pressures are still tame.”

In the third quarter of 2021, import prices jumped 6.5 per cent from the same period in 2020, accelerating from year-on-year growth of 4.7 per cent in the second quarter.

The higher level of CPI – a measure of inflation based on the price of a set basket of goods and services – was also a reflection of a reduced rates concession for domestic properties. The ceiling was dropped from HK$1,500 (US$192) to HK$1,000 in October for the next two quarters.

October’s year-on-year inflation rate – marking 10 straight months of increases – is the highest since July, when a five-year high of 3.7 per cent was recorded.