This news aggregator site highlights South African labour news from a wide range of internet and print sources. Each posting has a synopsis of the source article, together with a link or reference to the original. Postings cover the range of labour related matters from industrial relations to generalist human resources.
BL Premium reports that consumer inflation came in worse than expected in June, raising fears that higher fuel and food prices might now feed into more generalised price pressures across the economy, further pressing the Reserve Bank to up the pace of interest rate hikes.
Official figures showed consumer price inflation reached a 13-year high of 7.4% in June, well above May’s 6.5%. The consumer price index reading comes as the market waits for Thursday’s interest rate decision from the Reserve Bank’s monetary policy committee (MPC), which is expected to increase the benchmark repo rate by at least 50 basis points (bps) from 4.75% to 5.25%. SA is also experiencing high price pressures at the production level, with producer price inflation at 14.7%, creating an environment that does not provide for a rapid deceleration in domestic inflationary pressures. “Given more generalised price pressures, there is now a higher probability of a 75 bps rate hike,” predicted Johann Els, Old Mutual Investment Group chief economist. Bureau for Economic Research (BER) chief economist Hugo Pienaar said the BER has an out-of-consensus view for a 75 bps increase this week. He cited the more aggressive rate hike stance from several central banks since May, the weaker rand and an expected significant upward adjustment to the bank’s inflation forecast. “MPC could be more aggressive than is generally expected. In fact, though not our baseline, we do not completely rule out the possibility that the bank could hike by 100 bps this week,” Pienaar stated.
- Read the full original of the report in the above regard by Thuletho Zwane at BusinessLive (subscriber access only)
- Read too, Inflation rate of 7.4% means consumers must prepare for repo rate headache, at The Citizen
Get other news reports at the SA Labour News home page