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Israel inflation hits highest since 2008 at 5.4% in January

Benjamin Netanyahu delivers a speech REUTERS/Ammar Awad
The drive by Prime Minister Benjamin Netanyahu's government to change the justice system has sparked unprecedented protests and warnings

Israel’s inflation rate hit a 14-year high in January, rising to 5.4 percent over the prior 12 months, the Central Bureau of Statistics reported.

The rate was expected to remain at 5.3 percent, according to a Reuters poll of economists.

The consumer price index, in which the bureau slightly adjusted its basket weightings, rose 0.3 percent in January from December.

In January, Bank of Israel governor Amir Yaron said a series of government steps aimed at easing inflation and the cost of living were reasonable, but that short-term interest rates could still rise further.

The central bank has already responded with an aggressive interest rate cycle that has taken the benchmark interest rate to a more than 14-year high of 3.75 percent from 0.1 percent in April in a bid to return inflation to an official annual target of one to three percent.

Prime Minister Benjamin Netanyahu has said Israel will cancel or cut back recent hikes in property taxes, water and energy costs, adding action was needed before the 2023 budget was approved in May.

Last week the Central Bureau of Statistics said that housing remains the highest household expense for Israelis and has risen as a proportion of total costs.