Thu Oct 27 20:57:42 CAT 2016
Order restored at Sun City Prison after fiery protest over inmates’ TVs

Correctional Services said that “matters are under control” at Johannesburg’s Sun City Prison on Wed.

No relief in sight

By unknown | Jul 30, 2008 | COMMENTS [ 0 ]

Robert Laing

Robert Laing

Households are borrowing more despite the Reserve Bank's efforts to brake inflation, raising the chance that the Monetary Policy Committee (MPC) will vote for another 0,5percent interest rate increase on August 14.

Reserve Bank data released yesterday showed the slowdown in home loans was less than expected, and more than offset by a jump in credit card and business loans bundled into "other".

June's overall private sector credit extension rose to over 20percent year on year.

Further ammunition for raising interest rates again next month will probably be handed to the central bank by today's consumer inflation and tomorrow's producer inflation data.

Carmen Altenkirch, an economist at Nedbank, forecasts the MPC will hike rates by 50 basis points in August.

"The relatively robust growth in the headline credit figure will not help to make the case for keeping rates unchanged. However, this figure has probably been partially distorted by corporate credit demand and some element of distress borrowing by individuals."

Investec Asset Management and others have estimated that the new basket of goods, which will be used to measure inflation from January, will knock between 1,5percent and two percent off consumer inflation excluding mortgages (CPIX), which the Reserve Bank uses for its interest rate decisions.

Altenkirch doubts this will sway the MPC's next decision, but it may cause interest rates to drop faster than expected from next April.

While leasing finance continued to fall, instalment finance gained popularity.

Shireen Darmalingam, an economist at Standard Bank, said: "Instalment sales are used to finance durable goods with an economic lifetime of three to five years where the prices are high relative to the income of the purchaser. Astonishingly, this category of credit has posted phenomenal gain."

She attributed this surge to people going to banks rather than accepting the higher purchase deals offered by furniture shops.


Login OR Join up TO COMMENT