S.Africa inflation edges up, dampening talk of rate cut
The pace of South African consumer inflation edged up to 5.6 percent in October as food prices increased at the fastest rate since August 1994, official data showed Wednesday.
The prices increased 0.1 points from September’s annualised rate of 5.5 percent, as a hike in petrol prices also took its toll.
The data surprised investors who had expected inflation to dip slightly. It spells a tough decision for the country’s central bankers, who are currently meeting to set interest rate policy.
Africa’s largest economy is grappling with a dangerous mix of high inflation and slow growth.
Nedbank Capital’s Mohammed Nalla said the figure would lower expectations that the South African Reserve Bank will cut interest rates on Thursday.
Some had predicted the main interest rate would be cut in order to stimulate growth, but such a move now would also risk stoking inflation.