Demand for credit by the private sector soared by a record 27,48percent in the year to October, beating forecasts and supporting the case for another rate hike.

Demand for credit by the private sector soared by a record 27,48percent in the year to October, beating forecasts and supporting the case for another rate hike.

Data showed credit expansion sped up from an unrevised 25,28percent in September and surpassed expectations of a 26,60percent increase year-on-year, as intense spending continued despite higher lending rates.

During the same period the broadly defined M3 measure of money supply, often a pointer to rising inflation pressure, grew by 23,51 percent, also above expectations of 22,80 percent.

Analysts said the data showed consumers were not taking the reserve bank's warnings to cut spending and set arguments for more interest rate hikes.

"Evidently there has been little effect on consumer spending by the interest rate hikes we have had up to now," said Monica Ambrosi, an analyst at ETM.

"No doubt the reserve bank will need to keep hiking at least two more times," she said.

Faster economic growth has been driven largely by domestic demand, but spending has pushed household debt to record levels at almost 70 percent of disposable income, adding to inflationary pressures.

In response the reserve bank has hiked its key repo rate by 150 basis points since June, and another half percentage point rise to 9 percent after the bank's policy committee meets next week is almost a certainty.

Earlier this month Reserve Bank Governor Tito Mboweni said the Bank would remain resolute to keep inflation under control, and not hesitate to change monetary policy before Christmas if necessary. - Reuters