The cost of living in the Balearics is still on the rise and yesterday Madrid was forced to admit that this year's inflation rate is going to be double their initial forecasts. Last month the cost of living in the Balearics rose by .05 per cent with local inflation riding at 3.7 per cent over the past ten months and 4 per cent on the year, two points higher that the national average and sparking outrage amongst consumer associations which yesterday called on regional and central government to get a grip on inflation. October in the Balearics saw the cost of clothing rise by 4.4 per cent and education two per cent while entertainment and culture fell by one per cent, hotels, restaurant and bar prices by 0.2 per cent and communications 0.1 per cent. However, the slight drop in hotel and restaurant prices means nothing as, since the start of the year, hotel, bar and restaurant prices in the Balearics have shot up by six per cent and, over the past 12 months, the price of alcoholic and soft drinks has increased by 5.5 per cent. Balearic union leaders also rounded on the authorities, calling for urgent action as for each month the cost of living goes up, the real value ot workers' wages goes down. A spokesperson for the USO workers union said yesterday “the economy is out of control and the lack of central government investment in the Balearics is having a negative effect on people's livelihoods. On the streets of Palma yesterday there were nothing but complaints. Many people are finding it harder to make it to the end of the month “we're eating the same, but we're paying much more,” said one shopper. The Chambers of Commerce however are convinced that the rate of inflation will start to balance out early next year once the winter sales start, but warned that any military action against Iraq could prove counter productive, pushing up oil prices. Consumer confidence has been dented, but a drop in spending and the single currency, experts believe, may help to bring inflation back down and under control in the long run. However consumers in Palma were far from impressed with the latest figures yesterday.

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