Despite all indications that high inflation — which has clawed at the pockets of consumers for well over a year now — will start to lessen, we can’t count on interest rates following anytime soon.
This week, the South African Reserve Bank (Sarb) monetary policy committee (MPC) will meet to decide how big an interest rate hike consumers can endure, after inflation hit a 13-year high in July. Economists expect that inflation will have started to retreat from July’s 7.8% peak in August, as the month saw the first decline in the hefty petrol price since May.
However, with central banks around the world remaining hawkish, and inflation expectations driving wage demands higher, experts agree the Sarb is unlikely to let up, as it endeavours to restore the cost of borrowing to its pre-pandemic level.
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Sarah Smit
Sarah Smit is a general news reporter at the Mail & Guardian. She covers topics relating to labour, corruption and the law.
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