Inflation in the Balearics was running at 3.2 up to October and 3.5 per cent over the previous 12 months, compared to three per cent on a national level. The figures were released yesterday by the National Institute of Statistics. The figures show that the Balearics have the second highest inflation rate in Spain, even though prices dropped by 0.1 per cent last month. Top of the list were the Basque country and La Rioja, with 3.6 per cent. The lowest rate of inflation is to be found in Melilla, where it was only 2.4 per cent. This is a Spanish enclave in Morocco and while it may have little inflation, it has many other problems. Other region were inflation was lower than the national average were Cantabria (2.8 per cent), and Aragon, the Canary Islands and Castilla-La Mancha with 2.6 per cent. According to the Institute's report, the cost of transport, leisure and culture went down by one per cent in the Balearics. This is probably the result of the drop in petrol prices, which has not been passed on to the consumer in the form of lower bus or taxi fares. Alcohol and tobacco went up by 1.9 per cent and education by 1.6 per cent, which helped push inflation up. But when it comes to December, people forget about inflation and the hard times to come and embark on a spend, spend, spend' spree.