Consumer inflation dipped as expected in October, thanks in part to smaller fuel price increases and a continued moderation of food inflation.

The consumer price index (CPI) rose 4.8% in October from a year earlier, after an unrevised 5.1% increase in September.

The Reserve Bank’s monetary policy committee announces its decision on interest rates on Thursday, when it will detail its outlook for inflation over the medium term.

The Bank surprised by not cutting rates at its last meeting in September, and with credit rating downgrades to junk looming for SA — possibly as soon as Friday, when Moody’s and S&P are both expected to announce the results of their reviews — a cut on Thursday is unlikely, even in a benign inflation environment.

Investec economist Kamilla Kaplan said on Wednesday that the Bank was "likely to reiterate that the balance of risk to the inflation profile remains to the upside. The risks include the rand exchange rate, the pace of global monetary policy normalisation and electricity tariffs."

CPI inflation has been within the Bank’s 3%-6% target band since April, thanks in large part to tamer food inflation, which has come down steadily since returning to single digits in February, as a severe drought eased in most parts of the country.

The October fuel price increase was also smaller than September’s, Kaplan noted in a note last Friday, at 4c a litre for petrol and 23c a litre for diesel in October — against 29c and 41c respectively in September.

Compared with a month earlier, consumer inflation rose 0.3% in October, slower than the 0.5% month-on-month increase reported in September.

The CPI for goods rose 4.1% in October from a year earlier, and the CPI for services was up 5.5% on the year.

Health and education inflation rates are running higher than the overall rate. The CPI for healthcare rose 6.6% in October from a year earlier, and the education CPI was up 7% on the year.

The headline CPI rate reflects prices increases for a basket of goods as measured in urban centres. Stats SA also issues data for the whole country, and this showed an overall CPI increase of 4.6%. Food inflation for the whole country was 4.9%.

Inflation for pensioners was the same as for the general urban populace, at 4.8%.

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