THE headline consumer price index (CPI) for October came in at 5.9% year on year (y/y). This rate was the same as the annual rate of 5.9% y/y in September‚ Statistics SA figures showed yesterday.
Inflation rose by 0.2% month on month between September and October.
CPI – used to measure inflation – was expected to have remained unchanged‚ according to a BDpro median consensus forecast from a survey of 12 economists.
The food and nonalcoholic beverages index increased by 0.2% between September and October. The annual rate decreased to 7.8% in October from 8.5% in September.
The transport index increased by 0.3% between September and October. The annual rate increased to 4.8% in October from 4.2% in September.
The provinces with an annual inflation rate lower than or equal to headline inflation were Northern Cape (5.8%)‚ Gauteng (5.8%)‚ Eastern Cape (5.7%)‚ Mpumalanga (5.6%) and Free State (5.5%).
The provinces with an annual inflation rate higher than headline inflation were Limpopo (6.3%)‚ KwaZulu-Natal (6.2%)‚ North West (6.1%) and Western Cape (6.0%).
Econometrix economist Laura Campbell said: “The rand has remained relatively resilient on a trade-weighted basis.
“Under the circumstances‚ the monetary policy committee (MPC)‚ under the leadership of the new Reserve Bank governor‚ Lesetja Kganyago‚ will find it difficult to justify raising interest rates at the conclusion of its meeting today.
“Although it is unlikely that interest rates will rise this week‚ one cannot rule out the possibility that interest rates will rise in the medium term.
“The Reserve Bank has stated that the domestic economy is in a rising interest rate cycle and that there is a need to ‘normalise’ interest rates in order to encourage savings and investment in the South African economy.”
Meanwhile Investec chief economist Annabel Bishop said: “We continue to expect the trend will be downward for the remainder of this year.
“The MPC makes its decision on interest rates today and we expect rates to remain unchanged.
“The new Reserve Bank governor is perceived to be hawkish and could view the marginal uptick in core CPI inflation negatively.
“However‚ core inflation is influenced by administered prices excluding energy and petrol and so is not a true reading of the underlying demand-led price pressures in the SA economy.”
Reserve bank not likely to up interest rates
Inflation rose by 0.2% month on month between September and October.
CPI – used to measure inflation – was expected to have remained unchanged‚ according to a BDpro median consensus forecast from a survey of 12 economists.
The food and nonalcoholic beverages index increased by 0.2% between September and October. The annual rate decreased to 7.8% in October from 8.5% in September.
The transport index increased by 0.3% between September and October. The annual rate increased to 4.8% in October from 4.2% in September.
The provinces with an annual inflation rate lower than or equal to headline inflation were Northern Cape (5.8%)‚ Gauteng (5.8%)‚ Eastern Cape (5.7%)‚ Mpumalanga (5.6%) and Free State (5.5%).
The provinces with an annual inflation rate higher than headline inflation were Limpopo (6.3%)‚ KwaZulu-Natal (6.2%)‚ North West (6.1%) and Western Cape (6.0%).
Econometrix economist Laura Campbell said: “The rand has remained relatively resilient on a trade-weighted basis.
“Under the circumstances‚ the monetary policy committee (MPC)‚ under the leadership of the new Reserve Bank governor‚ Lesetja Kganyago‚ will find it difficult to justify raising interest rates at the conclusion of its meeting today.
“Although it is unlikely that interest rates will rise this week‚ one cannot rule out the possibility that interest rates will rise in the medium term.
“The Reserve Bank has stated that the domestic economy is in a rising interest rate cycle and that there is a need to ‘normalise’ interest rates in order to encourage savings and investment in the South African economy.”
Meanwhile Investec chief economist Annabel Bishop said: “We continue to expect the trend will be downward for the remainder of this year.
“The MPC makes its decision on interest rates today and we expect rates to remain unchanged.
“The new Reserve Bank governor is perceived to be hawkish and could view the marginal uptick in core CPI inflation negatively.
“However‚ core inflation is influenced by administered prices excluding energy and petrol and so is not a true reading of the underlying demand-led price pressures in the SA economy.”
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