With another fuel price increase expected to be announced on Friday, producer inflation will continue to increase, quashing any hopes for another interest rate cut in 2018. Producer inflation ticked up to 4.6% in May from 4.4% in April on the back of two consecutive months of fuel increases. The Automobile Association (AA) released its fuel price outlook for July on Thursday with expectations of petrol prices to rise by 26c a litre in July‚ diesel by 24c and illuminating paraffin by 20c. The price of oil and the rand’s value against the US dollar were primary factors that influenced the fuel price. At the last meeting of the Monetary Policy Committee (MPC) in May, Reserve Bank governor Lesetja Kganyago mentioned these as risks to the inflation outlook. "Further hefty fuel price increases in June and July due to the recent increase in global oil prices and a somewhat weaker rand will exert further upward pressure on producer inflation in coming months," said NKC economist Elize Kruge...
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