HONG KONG - HONG Kong's inflation jumped 3.1 per cent year-on-year in November, sharply up from 1.8 per cent in October, after a public housing subsidy expired, official figures showed on Monday.

The increase came after the three-month government waiver on public housing rents ended, the Census and Statistics Department said in a statement.

A survey of analysts by Dow Jones Newswires had expected the November rise to be 2.4 per cent.

However, the underlying inflation rate - which excludes one-off government subsidy measures - actually fell year-on-year from 5.9 per cent in October to 5.6 per cent, the figures showed.

The drop was a mainly the result of decreases in the price of fuel, both for the car and in the home.

Food remained the largest factor driving up prices. Excluding meals bought away from home, it rose 14.9 per cent year-on-year.

Rice rose 54.1 per cent, fresh-water fish was up 27.3 per cent, while beef rose 23 per cent, showing food remained expensive in the southern Chinese city, as it has all year.

However, clothing and footwear rose just 0.5 per cent over the period, while the price of gas, electricity and water actually dropped 35.3 per cent, largely as a result of a government electricity subsidy unveiled in the summer.

For the first 11 months of the year, prices rose by 4.5 per cent over a year earlier, the figures showed.

A government spokesman said that although the headline figure for consumer price inflation had risen, underlying inflation continued to ease.

'Looking ahead, the underlying inflation rate is expected to come down further, as price pressures have been receding amid the weak demand conditions, both externally and locally,' he said in a statement.

Inflation, driven by food prices, was the major worry in the southern Chinese city earlier this year.

The global slowdown has hit the financial hub hard and it slipped into recession in the third quarter, official figures showed, prompting government attempts to stimulate the economy. -- AFP