At this rate, the CPI is likely to breach the Reserve Bank’s target of 3-6% much sooner than in the first quarter of next year, as the Bank anticipates. This may, in turn, force the bank to raise rates sooner than anticipated. The Bank has started its bimonthly monetary policy committee meeting and will announce its decision tomorrow.
The CPI measures the rate at which prices of goods and services rise. It influences factors such as salary increase demands as it measures the buying power of money over time.
Stats SA says the food and beverages index increased by 0,5% between March and April this year, while the alcoholic beverages and tobacco index rose by 1,2% over the same period. The transport index rose 4,5% in April mainly due to the 156 cents per litre petrol price increase, while the miscellaneous goods and service index rose by 0,2%.
The statistical agency is due to release retail figures later on Wednesday, which also give an indication of the likely direction of interest rates.