Korean prices fell in May

After the news from the US last Friday that the core personal consumption expenditures index was up only 0.1 percent or 1.4 percent year-on-year, the latest news from South Korea suggests that global inflation may not be heating up as badly as feared, despite the low interest rate environment globally.

According to Bloomberg, South Korean consumer prices fell 0.1 percent in May from April. Food prices fell as a result of good farm output, with vegetable prices leading the drop with a 13.3-percent fall.

However, the report added that core prices, which exclude food and energy costs, rose 0.2 percent from April and 2.7 percent from a year earlier.

And further rises in oil prices may yet fuel further inflation, after 22 people were killed by Islamic militants over the weekend in Khobar, Saudi Arabia.