Consumer inflation ticks up, but food inflation slows further
Fuel prices were higher but food inflation was helped by lower grain prices
Consumer inflation picked up as expected in August, as higher fuel prices bit. The consumer price index (CPI) rose 4.8% in August from a year earlier, Statistics SA said on Wednesday. That compares with a 4.6% year-on-year increase in July, and expectations that inflation would pick up to 4.9%. CPI inflation, on which the Reserve Bank bases its 3%-6% inflation target, has been within that band since April this year. Tamer inflation enabled the Bank to cut interest rates in July for the first time in five years to offer some stimulus to SA’s moribund economy, and a second cut is widely expected when the Bank announces the outcome of its three-day monetary policy committee (MPC) meeting on Thursday. Wednesday’s numbers will have little bearing on that decision, though, as the Bank bases its decisions on the outlook for inflation, rather than historical data. One of the main factors in moderating inflation this year has been slowing food price increases. Food inflation spent the better...
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