Consumer price index soars by 0.8% in April, more than expected; inflation stays 5%

Consumer prices in Israel in April rose at a faster rate than forecast, the Central Bureau of Statistics says, putting further pressure on the Bank of Israel to hike interest rates again at the end of the month.

The consumer price index (CPI), a measure of inflation that tracks the average cost of household goods, rose last month by 0.8% above analysts’ expectations of 0.4% to 0.5%, bringing annual inflation over the past 12 months to 5%.

Increases were seen in April in the cost of fresh vegetables and fruits, which rose by 4%, while transportation costs were up by 2.5%, clothing and footwear costs were up by 1.9% and culture and entertainment costs increased by 1.8%. These were offset by declines in house maintenance costs, which were down by 0.5%, and furniture and home equipment costs which fell by 0.2%, according to the statistics bureau.

The Bank of Israel has steadily raised its benchmark interest rate from a record low of 0.1% in April 2022 to 4.5% this year in a bid to rein in inflation, which has been hovering above 5% in annual terms for more than six months, falling short of the government’s target range of between 1% to 3%.