ISLAMABAD, Nov 16: Inflation rose by 8.55 per cent year-on-year during July-October of the fiscal year 2005-06 mainly because of increases in house rents and prices of transport and communication items.

Official data released by the Federal Bureau of Statistics (FBS) here on Wednesday indicated that in October, the year-on-year increase in inflation was 8.27 per cent.

Inflation measured by the Consumer Price Index (CPI) has been creeping steadily upward during the current year. However, it declined slightly to 8.27 per cent in October 2005 from 8.70 per cent in the corresponding month last year. This means average prices of 374 items of daily use rise over eight per cent between July and Oct 2005, over June-July 2004-05, putting more pressure on the consumers and restricting their buying power.

Analysts say if the government does not come up with effective counter measures on a crash basis, the end of the current year may witness a double-digit official inflation. The targeted level of inflation is eight per cent for the fiscal year 2005-06.

The more disturbing aspect of the current year inflation figures is that factors behind them — housing, food and POL prices — disproportionately affect the poor. The increase in rents could possibly have a spiralling effect, with owners of houses demanding higher rents in response to an overall increase in general price level.

In October 2005, the CPI increased by 0.94 per cent over September 2005, and by 8.27 per cent over the corresponding month last year.

According to a group-wise analysis, 12 items in the group food and beverages remained on top as the group saw a persisting rising trend in October 2005 when compared with September 2005. These include: fresh fruits (23.13 per cent), eggs (12.63 per cent), vegetables (11.92 per cent), tomatoes (4.62 per cent), dry fruits (4.20 per cent), gur (1.94 per cent) gram whole (1.93 per cent), betel leaves and nuts (1.33 per cent), pulse mash (1.17 per cent), sweat meal and nimco (1.03 per cent), milk products (0.42 per cent) and meat (0.40 per cent).

Apparel, textile and footwear items remained at the second position, recording an increase against September 2005. They are: tailoring charges (1.46 per cent), silk, linen, woollen cloth (1.08 per cent), hosiery (0.93 per cent), woollen readymade garments (0.87 per cent) and cotton cloth (0.57 per cent).

The groups undergoing the next highest increases in October 2005, as compared to September 2005 were transport and communication: transport fare charges (4.95pc), tyre and tubes (1.08 per cent), hosiery (0.93per cent) and service charges (0.93 per cent). Fuel and lighting energy items: fires wood by 2.64 per cent, text books (1.61 per cent) and tuition fee (1.15 per cent).

The index of cleaning, laundry and personal appearance also registered an increase during the month under review: jewellery (3.76 per cent), haircut and beauty parlour charges (1.24 per cent) and laundry charges (0.83 per cent).