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May CPI hits high end of forecasts: 0.7% By Moti Bassok The May consumer price index (CPI) rose 0.7%. This big increase came in at the top of the range of forecasts of 0.5%-0.7%, and was the highest inflation rate for May in the last seven years. In response to the high May CPI, the governor of the Bank of Israel, Stanley Fischer, is expected to raise interest rates for the second month in a row at the end of June, most likely by 0.25% to 3.75%. Advertisement Annualized inflation for 2008 is now running at 5%, and the index has risen 2.2% since the beginning of the year. Over the past 12 months it is up 5.4% - all while the cabinet and central bank's 2008 inflation target is still 1% to 3% for the year. Prices rose in almost all categories, with the major increases coming for fresh fruits, 16.7%; fuel, 4.9%; and meat, poultry and fish, 3.2%. At the same time, fresh vegetable prices fell 13.4% and Internet services were down 9.4%. As usual, the poor were hit the hardest by last month's inflation, with prices for the wealthiest 20% of the population rising 0.6% while those for the bottom fifth rose 0.7%. The reason is the larger proportion of food in the consumer basket for the poor compared with the rich, and last month food prices were up 1.9%. Rice skyrocketed 40.9%, and frozen meat 19.2%. Over the past 12 months food prices have climbed 12.5%. Fruit and vegetable prices offset each other, and together they were unchanged for the month. As for so-called core inflation, the CPI without energy costs over the past 12 months is up 4.6%, and without housing, 6.2%. Housing costs were up only 0.1%, though household maintenance rose 0.6%. Clothing and shoes rose 3.1%. Industrialists and businessmen called on Fischer not to raise rates as the shekel is still too strong. Bookmark to del.icio.us   Nazi hunted Nazi sheltered by Austria seen enjoying Euro 2008 games. Battle of the attitude An 'Israeli au pair' seems to be the ultimate oxymoron.

Read & React Rice to Israel: 'Extremely important' to grant Gaza Fulbright students exit visas Responses: 165 Akiva Eldar: Our fixation on Iran leads world to see Israel as the cause of tension Responses: 163 Israeli hurt as Grad-type rockets fired from Gaza hit Ashkelon Responses: 94 Family of captive soldier: Deal with Hezbollah developing for return of troops Responses: 79 Battle of the attitude: Israeli girls vs. American Jews Responses: 85 More Headlines 21:10 Israeli hurt as Grad-type rockets hit Ashkelon 01:09 UN special envoy criticizes Israel for talks with Syria 23:59 Heftziba CEO Yona, who left hundreds homeless, gets 7 years in jail under plea deal 02:06 U.S. official: W. Bank still same after Israel lifted roadblocks 21:13 Iran, fearing sanctions, said to have pulled $75b from EU banks 22:59 UN official who compared Israel to Nazis turns the spotlight on Palestinians 23:42 Bush, Musharraf, Ahmadinejad top least-trusted leaders list 02:36 Police ignored murdered lawyer's complaint that his life was in peril 22:57 Deputy Defense Min.: Residents of southern Israel should stop complaining about Qassams 15:39 Family of captive soldier: Deal with Hezbollah developing 00:37 Rice, in Beirut, voices U.S. backing for gov't that ups Hezbollah's power 21:21 Katsav lawyers slam 'public lynch' over sex crime charges 21:26 Nazi sheltered by Austria as too ill for trial, seen enjoying Euro 2008 21:42 Haredis won't protest Jerusalem Gay Pride parade to minimize its publicity 15:45 Germany mulls probe of Jewish group overseeing Holocaust restitution Previous Editions Select Day 16 jun 15 jun 13 jun 12 jun 11 jun 10 jun 09 jun 08 jun 06 jun 05 jun 04 jun 03 jun

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