The cost of living in the Balearics rose by 4.5 per cent last year, more than any other region in Spain. Regional inflation showed no let up in December with the consumer price index showing a rise of 0.4 per cent, one point higher than the national average, meaning that 2002 came to a close with an inflation rate of 4.5 per cent in the Balearics, much higher that the 4 per cent national average. Items most effected by the runaway Balearic inflation were clothes and footwear, prices went up by eight per cent last year. Hotel, restaurant and bar prices rose by 6.2 per cent, food and beverages 5.2 per cent and transport costs went up by 5.1 per cent. Only communications costs fell by five per cent mainly because of the growing competition in the sector. Last year's rate of inflation was nearly double the economic growth figures which struggled to reach two per cent, well shy of the Balearic government's confident predictions at the outset of 2002. The Balearic rate of inflation is one of the highest in the European Union. France, for example, yesterday posted a rate of inflation for 2002 of 2.3 per cent and Germany, on the brink of recession, 1.3 per cent. In fact, Spain's 4 per cent rate of inflation is double the government's 2 per cent forecast. Yesterday the Balearic Minister for Labour, Miquel Rosselló, admitted that inflation in 2002 was spectacular, especially in the housing market. He also admitted that, as a true socialist, I will do everything I can to ensure that wages are increased. With talks looming between unions and employers, Miquel Rosselló said that in view of the high rate of inflation, not only in the Balearics but Spain in general, the rise in the cost of living has to be reflected in people's wages. Few people in the Balearics failed to notice the rising cost of living last year and many also blamed the introduction of the euro for also pushing prices up by being rounded up. In some cases, according to studies carried out by consumer groups at the end of last year, the price of basic food stuffs rose by as much as 30 per cent on the back of the euro.