Inflation slows, but not enough to bust 6% ceiling

The consumer price index excluding mortgages (CPIX) rate slowed to 6,3percent in the year to August from 6,5percent in July, remaining above government's 6percent ceiling for the fifth month in a row.

The consumer price index excluding mortgages (CPIX) rate slowed to 6,3percent in the year to August from 6,5percent in July, remaining above government's 6percent ceiling for the fifth month in a row.

A recent poll forecast CPIX would slow to 6,2percent year-on-year and predicted a rise of 0,3 percent month-on-month.

CPIX is targeted by the Reserve Bank for its interest rate decisions.

Statistics South Africa reported yesterday that the all-items consumer price index (CPI) rose by an annual rate of 6,8percent, compared to 7,0percent in July.

On a monthly basis, CPIX rose by 0,3percent in August compared to 1,1percent growth previously, while headline CPI increased by 0,5percent month-on-month.

Cadiz African Harvest chief economist Adenaan Hardien said: "The numbers are bang in line with our expectations and so it doesn't change our view on interest rates, which is still that we expect a hike of 50 basis points in October."

Reserve Bank Governor Tito Mboweni said last week the bank would continue to focus on its mandate to return inflation to within the target range and act decisively against broader price pressures. - Reuters

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