Tamlyn Stewart

Tamlyn Stewart

Cooling food and fuel prices saw consumer inflation slow down in September, signalling that inflation has now passed its peak, analysts say.

CPIX (consumer inflation excluding interest rates on mortgage bonds) for September was 13,0 percent - 0,6 of a percentage point lower than the 13,6 percent recorded in August.

The lower number was mainly due to decreases in the CPI for transport, which decreased to 20 percent in September from 22,7 percent in August, mainly due to a falling petrol price.

CPI for food rose by 17,6 percent in September, down from 18,8 percent the previous month.

Food and fuel have been the two strongest drivers of consumer inflation this year.

Standard Bank economist Danelee van Dyk said that inflation should continue to fall: "We think August was the peak and fortunately the downdraft in petrol in October and November would contribute to lower inflation. At this point, it looks like we are in a downward trend."

She said Standard Bank did not forecast any interest rate hikes to stem the Rand's current weakness as further hikes would aggravate already slowing economic growth.

Christo Luus, economist at Quantec Research said an interest rate cut could still be expected in April next year: "The Rand has come back, it is likely to subside a bit, so we still think we can look forward to a rate cut in April."

But he warned that "the joker in the pack is what electricity prices are going to do later next year, and the unions' aggression regarding wage demands".