Rising food and fuel prices cause upward pressure on core inflation by increasing production costs
Inflation expectations are rising, which will be of concern to the Bank’s monetary policy committee members. Picture: 123RF/ROLLINGCAMERA
After all, the bounce in oil and soft commodity prices reflects supply disruption, partly due to the Ukraine-Russia war, rather than demand-led inflation. Meanwhile, inflation expectations are rising, which will be of concern to the Bank’s monetary policy committee members. For example, the Bureau for Economic Research’s inflation expectations survey for the first quarter of 2022 shows expectations of 5.1% and 5% for 2022 and 2023 respectively.Not too long ago, inflation expectations were seemingly comfortably anchored at close to 4.5% — the midpoint of the Bank’s inflation target range.
Contained inflation expectations are a key anchor for the currency. From this perspective, SA’s high long-term inflation expectations are a concern. The MPC statement notes market participants are pricing in five-year inflation expectations of close to 6%, while 15-year inflation expectations are not far from 7% — well above long-term US inflation expectations.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Arthur Zwane explains halftime instructions to Kaizer Chiefs playersKaizer Chiefs interim coach Arthur Zwane has revealed what he told the players at halftime of their Soweto derby clash against Swallows. SLSiya Read more:
Read more »
Arthur Zwane: we came alive after Phathutshedzo Nange's red cardKaizer Chiefs interim coach Arthur Zwane has explained why he felt the Soweto giants were a better side after Phathutshedzo Nange's sending off against Swallows. Read more ➡️
Read more »
‘Go vegan, stay home and drink less’Bank of America offers South Africans a few tips to beat the Reserve Bank’s latest interest rate hike.
Read more »
Bank of America says it sees a 1-in-3 chance of a US recession some time next year, but it will be mild | BusinessinsiderThe bank says a 'bumpy landing' is more likely from the Fed's interest rate increases, though it expects bigger hikes than what's priced into the market.
Read more »
'I am not a thief, I am not a criminal' — DA provincial speaker“I am not a thief, I am not a criminal - my record of public service speaks for itself,” says Western Cape legislature speaker Masizole Mnqasela
Read more »
Arthur Zwane: we came alive after Phathutshedzo Nange's red cardKaizer Chiefs interim coach Arthur Zwane has explained why he felt the Soweto giants were a better side after Phathutshedzo Nange's sending off against Swallows. Read more ➡️
Read more »