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THE Monetary Policy Committee of the South African Reserve Bank (SARB) on Thursday announced that interest rates will remain unchanged: the bank repurchase (repo) rate will remain at 3.5%, with the prime lending rate therefore remaining at 7%. The committee revised Consumer Price Index inflation for 2021 slightly higher to 4.3% (up from 4.2%), and revised lower to 4.2% (from 4.4%) inflation in 2022. The SARB says its forecast reflects higher food and petrol prices that will push up near-term headline inflation, before moderating in the latter half of this year and into 2022. Electricity and other administered prices also continue to present short-term risks, it said.

CONSUMER Price Index inflation (CPI) for June was down slightly, at 4.9% year-onyear compared with 5.2% year-on-year in May. Johann van Tonder, economist at Momentum, says the lower headline rate was mostly the result of a lower year-onyear increase in the price of fuel, although meat and rent had contributed to upward pressure. He says CPI for July and August may receive upward pressure from municipal rate increases and the effect of the riots.