As a result of this rise, the actual inflation rate for the past 12 months (the June 2011 index compared to June 2010) now totals 4.2%, exceeding the upper limit of the target range set by the government (1-3%) by 1.2%.
The inflation trend in the past four months is lower, totaling 2.9%.
Last month's CPI was mainly affected by price hikes in the following categories: Clothing and footwear (8.6%), food (0.8%) and housing (0.5%). These prices hikes were partially compensated by price reductions at an average rate of 2.1% in the fruit and vegetable category.
Price hikes were mainly recorded in the following products: Milk and dairy products (3.2%), butter (16%), cars (1.3%), clothing (9.3%), footwear (6.4%) and coffee (7.9%).
Price reductions were recorded in the following products: Books (11.6%), travel expenses (0.7%), poultry (2%), fresh vegetables (3.1%), fresh fruit (4.7%) and petrol (2.1%).
The housing services index saw a 0.7% increase and the rent index went up by 0.3%.
In spite of the inflation rate's ongoing deviation from the annual target, Bank of Israel Governor Stanley Fischer is expected to leave the interest rate unchanged at 3.25% this month, for the second time in a row.
Fischer's inclination to leave August's interest rate unchanged is backed by several factors: Fear of a further appreciation of the shekel against the US dollar and euro, the slowdown recorded in Israel's economic activity in the past two months, and fear of a renewed regression in the global economy in light of the large deficits of the US government and the new round of debt crises in Europe.
Yair Hasson contributed to this report
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