Israel Inflation Hits 14-year High at 4.4%

The Central Bureau of Statistics in Israel announced on Friday that the annual consumer price index (CPI) reached a record high of 4.4% in June, the highest since November 2008.

The Bank of Israel is widely expected to raise interest rates again at its next meeting on August 22 after three consecutive increases since April that raised the benchmark interest rate to 1.25% from 0.1%.

Last week it raised the interest rate by half a point.

While Israel's inflation rate is about half that of America and Europe, its central bank says some of the price pressures stem from global supply problems and commodity prices, while policy makers are concerned about the ultra-low unemployment rate of 3% and driving up wages.

Consumer demand remains strong, which is contributing to the expected economic growth of 5% this year.

Israeli media said Economy Minister Orna Barbivai had asked major supermarket chains in Israel to postpone for two weeks the regulated hike in bread prices, which were due to jump by 20% next week. The chains agreed to the minister's request.

It is noteworthy that inflation in the United States reached a record high in 40 years to reach 9.1%, despite a sharp rise in the Federal Reserve interest, while inflation recorded a significant increase in the European Union, reaching 8.6% last month.