South African official inflation rises to 5.0%

20th July 2011, Comments 0 comments

South Africa's headline inflation jumped to 5.0 percent in June, from 4.5 percent in May, owing to the rising cost of food, rents and utility services, the national statistics agency said on Wednesday.

"On average, prices increased by 0.4 percent between May 2011 and June 2011," the agency said in a statement.

The housing and utilities index increased by 1.0 between May 2011 and June 2011, mainly because of a 1.5-percent rise in rents for housing.

The quickening inflation is likely to impact on the interest decision which is expected on Thursday, Kamilla Golda an economist at Econometrix Treasury Management said.

"There is also concern over the global economic slowdown and the impact on local growth. So the monetary policy committee is likely to keep to interest rate unchanged for a while," said Golda.

The Reserve Bank has left the benchmark interest rate unchanged at 5.5 percent this year, after reducing it by 650 basis points in the two years to November 2010 to boost growth after a recession in 2009.

© 2011 AFP

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