Bills balloon: Consumer prices in July rose 6.3% over the same month last year.

Consumer prices in July rose 6.3% over the same month last year, and were up on June's 6.1% rise, the Census & Statistics Department says. The rise was mainly due to increases in the price of fresh vegetables and private housing rentals. 

The headline inflation rate of 6.3% was the same as the underlying rate because the effect of the rates concession was offset by a similar relief measure in July last year.

July saw year-on-year increases in the price of food (excluding meals bought away from home) rise 19.7%. Foods with large price hikes were rice (66.3%), beef (45.6%), canned meat (39.3%), fresh-water fish (34.1%), edible oils (32.8%), pork (32.2%), fresh vegetables (28.3%) and other meat (23%). 

Year-on-year increases were also recorded in electricity, gas and water (7.9%), housing (6.7%), meals bought away from home (6.6%), miscellaneous goods (5.7%), transport (3.9%), clothing and footwear (1.4%) and alcoholic drinks and tobacco (1.3%). A year-on-year fall was recorded for durable goods (1%).

Uncertain outlook

The inflation outlook for the rest of the year is rather uncertain. Although food and energy prices in the international markets have eased somewhat more recently, they remain elevated compared with a year earlier. The earlier surges in private housing rents will increasingly be reflected in the consumer price inflation in the coming months.

However, the improvement in labour productivity and the expected moderation in the rate of economic growth in the period ahead should provide some alleviation effect. The relief measures announced in the 2008-09 Budget and by the Chief Executive in July will also help lower the headline inflation later this year.