Latest data from Stats SA seals the deal on another rate hike next week.
Following an uptick in headline inflation, economists at Nedbank say this has sealed the deal on another interest rate hike in March.
“In our opinion, today’s inflation numbers seal the deal on another 25-basis-point rate hike next week. The MPC will be concerned by the continued acceleration in food prices, which appears to reflect the adverse impact of load-shedding on production costs. Headline inflation grew from 6.9% in January to 7.0% in March, while core inflation saw a bigger jump, from 4.9% to 5.2%.
Nedbank said that core inflation is also a key concern, having surprised to the upside. At 5.2% – the highest since February 2017 – the numbers came in higher than the expected 5.0%. “Food inflation remains sticky but is probably near its peak and should also begin trending down during the second quarter, reflecting the lagged effect of the moderation in global food prices and favourable weather conditions,” it said.
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