THURSDAY, 12.00NOON:
ACCORDING to the latest consumer price index published by the Central Statistical Service, the inflation rate in July increased by 0,3 percentage points to an annualised 9,1%.
The major causes of the increase are food and housing, mainly due to a 15% increase in the price index for assessment rates and a 13,4% increase in water tariffs. The core inflation rate in July, which does not include volatile food prices and assessment rates, was 8,7% in July, a 0,1 percentage point decrease over the previous month. Thus, the core inflation rate fell in July while the official inflation rate increased.
The core rate is intended to show up the underlying inflationary pressures in the economy and thus excludes items from the CPI basket that show volatile price changes, are subject to temporary influences or affected by government intervention and policy.
The latest inflation figure tends to support the continuing firm monetary policy of Reserve Bank governor Chris Stals, who scotched hopes of an early drop in interest rates in his annual address to the Reserve Bank board earlier this week.
The markets had been expecting consumer inflation to continue its downward trend in July, with hopes the figure would drop to 8,5%. Analysts are likely to give more weight to the core inflation rate, which more closely reflected market expectations.