Are rate hikes working?

Lihle Z Mtshali

Lihle Z Mtshali

Have interest rates dented consumer spending, or is it still on an upward trajectory?

The question of whether or not South Africans are tightening their belts will be answered on Wednesday when Statistics South Africa releases consumer inflation data for May.

Double digit CPIX (inflation excluding interest rates on mortgage bonds) was recorded in March at 10,1percent and continued to surprise in April with 10,4percent.

Economists expect CPIX to remain in the double digits in May.

High food and fuel prices continue to take the blame for the rise in inflation, but prices of other goods have also been on the rise.

"Inflation in these categories, such as household operation costs, furniture and clothing, has accelerated to higher-than-anticipated levels, denoting that inflation has become more widespread among consumer goods," said Standard Bank.