{"id":843794,"date":"2025-11-19T11:38:10","date_gmt":"2025-11-19T09:38:10","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=843794"},"modified":"2025-11-19T11:38:16","modified_gmt":"2025-11-19T09:38:16","slug":"inflation-heats-up-as-south-africa-braces-for-next-interest-rate-decision","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/843794\/inflation-heats-up-as-south-africa-braces-for-next-interest-rate-decision\/","title":{"rendered":"Inflation heats up as South Africa braces for next interest rate decision"},"content":{"rendered":"\n

Annual consumer inflation edged higher to 3.6% in October, up from 3.4% in September, in line with market expectations.<\/p>\n\n\n\n

This is the highest inflation print since September\u00a02024, when the rate was 3.8%. The consumer price index (CPI) increased by 0.1% month-on-month in October\u00a02025.<\/p>\n\n\n\n

This puts some pressure on the South African Reserve Bank’s Monetary Policy Committee (MPC) this week, as the country awaits the final interest rate decision for the year.<\/p>\n\n\n\n

Economists and analysts anticipate the MPC to cut interest rates by 25 basis points on Thursday (20 November), but have flagged rising inflation as a possible barrier that could convince a hawkish panel to hold.<\/p>\n\n\n\n

This position could be exacerbated by the recent formal adoption of a 3% inflation target by the National Treasury.<\/p>\n\n\n\n

However, according to Investec, consumer price inflation is not expected to rise much further over the remainder of the year, and the new inflation target carries a flexible range of 1 percentage point.<\/p>\n\n\n\n

Given this, the move away from 3.0% y\/y in H2.25 is not expected to be met with higher interest rates.<\/p>\n\n\n\n

Instead, South Africa remains in a rate-cutting cycle, “but not necessarily at every meeting”, the bank said. Markets see an 88% chance of a 25bp cut this week.<\/p>\n\n\n\n

Looking at inflation drivers, the transport, recreation, sport and culture, and alcoholic beverages and tobacco categories recorded hotter annual rates. <\/p>\n\n\n\n

Inflation cooled for several categories, most notably restaurants and accommodation services and food and non-alcoholic beverages (NAB).<\/p>\n\n\n\n

Annual inflation for food and NAB weakened to 3.9% from 4.5% in September. <\/p>\n\n\n\n

Several food and NAB categories witnessed a slowdown, including vegetables; fruits and nuts; cold and hot beverages; sugar, confectionery and desserts; and meat. <\/p>\n\n\n\n

Categories that recorded faster price growth include cereal products; fish and other seafood; oils and fats; milk, other dairy products and eggs; and the miscellaneous group \u2018other food\u2019.<\/p>\n\n\n\n

Meat inflation retreated from its highest level in almost eight years, moderating to 11.4% from 11.7% in September. <\/p>\n\n\n\n

Despite the lower reading, several meat products remain in double-digit territory, including stewing beef (30.9%), beef steak (27.9%), beef mince (27.1%), sausages (17.3%), boerewors (15.6%) and mutton (13.4%).<\/p>\n\n\n\n

Not all was bad news on the meat front, however. Corned meat, fresh whole chicken and bacon are cheaper than a year ago. <\/p>\n\n\n\n

Inflation for sugar, confectionery and desserts slowed to 3.5%, the lowest since March\u00a02022 (3.4%). White and brown sugar, jam, peanut butter, and chocolate recorded lower rates.<\/p>\n\n\n\n

Hot beverage inflation dipped to 8.8%, its weakest level since August\u00a02023 (6.3%). In October, softer rates were recorded for black tea (5.1%), rooibos tea (1.6%) and cappuccino sachets (1.4%).<\/p>\n\n\n\n

The annual rate for cereal products rose to 2.0% from 1.6% in September. Samp and maize meal recorded double-digit inflation in October, with maize meal reaching a four-month high at 10.7%. <\/p>\n\n\n\n

Several products cost less than they did a year ago, including white rice, brown bread, hot cereals and instant noodles.<\/p>\n\n\n\n

Although it is in deflationary territory, the milk, other dairy products and eggs category witnessed a rise from -1.6% in September to -1.5% in October. <\/p>\n\n\n\n

A range of products carry a cheaper price tag than they did in the same month last year, including eggs, maize-based food drinks and several varieties of milk.<\/p>\n\n\n\n

The graph below shows the food and beverage products that recorded the sharpest price increases and decreases in October.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

Other notable price changes<\/h2>\n\n\n\n

The annual rate for transport turned positive following 13 months of deflation, rising from \u20110.1% in September to 1.5% in October. <\/p>\n\n\n\n

Fuel prices increased by 0.1% between September and October, with diesel declining by 0.7% and petrol rising by 0.2%. <\/p>\n\n\n\n

This took the annual rate for fuel to 3.3%, the first positive reading since August\u00a02024.<\/p>\n\n\n\n

While the fuel price saw an 8c\/litre lift, and so did not contribute to the inflation outcome, November\u2019s fuel price change of a -51c\/litre drop will aid inflation lower by about -0.1% m\/m.<\/p>\n\n\n\n

The index for recreation, sport and culture increased to 3.4% from 2.9% in September. The top 10 books sold across several retailers recorded an annual inflation rate of 59.4%. <\/p>\n\n\n\n

Movie tickets increased by 15.8% and gym fees by 10.5% in the 12 months to October. However, ticket prices for sporting events declined by 12.6% over the same period.<\/p>\n\n\n\n

Stats SA publishes inflation rates for each province and for different expenditure bands. <\/p>\n\n\n\n

The province with the highest inflation rate in October was North West at 4.3%, and the lowest was Eastern Cape at 3.1%. <\/p>\n\n\n\n

While the poorest typically experience higher inflation rates, in October the richest recorded the highest rate at 3.9%.<\/p>\n","protected":false},"excerpt":{"rendered":"

Annual consumer inflation edged higher in October, putting pressure on expectations for interest rate cuts this week\u2014though not unexpectedly.<\/p>\n","protected":false},"author":10,"featured_media":822696,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[2829,2922,1809],"class_list":["post-843794","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-cpi","tag-interest-rates","tag-stats-sa"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/843794","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=843794"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/843794\/revisions"}],"predecessor-version":[{"id":843803,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/843794\/revisions\/843803"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/822696"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=843794"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=843794"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=843794"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}