Trade union Solidarity expressed its concern on Wednesday about the impact of higher fuel inflation and a consumer inflation rate that threatens to gravely impoverish the consumer.

Presently, fuel price inflation stands at 29.2%. With reference to the expectation that the SA Reserve Bank will increase the interest rate on Thursday, Theuns du Buisson, economics researcher at the Solidarity Research Institute (SRI), commented: “Higher interest rates will not make the world’s oil flow, will not bring peace to Ukraine or change US monetary policy. Consumers are under incredible pressure and any attempt to do something about it by increasing interest rates will only make matters worse.” According to Du Buisson, interest rate hikes will only put consumers under greater pressure while doing nothing to control inflation. “The only thing that an interest rate increase will achieve is to withdraw capital from the economy which will impede job creation and growth. Rates in South Africa are already relatively high compared to the rest of the world. Further increases will prejudice all chances for proper economic growth by restricting local citizens’ access to capital,” Du Buisson contended. In his view, there were more important problems that needed to be addressed, such as fuel price inflation. “Fuel prices should be totally deregulated so that the market can determine prices that give consumers a breather,” Du Buisson argued.

• Read Solidarity’s press statement in the above regard at Politicsweb

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