Economists think the economy is the Reserve Bank’s bigger fear right now
INTEREST rates will probably remain unchanged on Thursday, as concern about weak economic growth concern temporarily outweighs concern about high inflation, economists said on Friday.This will provide some relief to highly indebted consumers whose disposable incomes are not only taking strain from higher interest rates but are also being eroded by high inflation and food prices.A possible 50c a litre increase in the petrol price in October will also weigh on consumers.The Reserve Bank’s monetary policy committee (MPC) will begin its three-day meeting on Tuesday, which will culminate in a rates decision on Thursday.All of the 11 surveyed economists expect the repo rate to remain on hold at 7%.Rates have been raised by a cumulative 200 basis points between January 2014 and March 2016.Despite high inflation, the current rate-hiking cycle has been gradual in light of weak economic growth.Macquarie Securities economist Elna Moolman said the MPC’s rhetoric may still have a slightly hawkis...
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