Thursday, January 31, 2008

Inflation surge to 8,6% will test Bank’s mettle

SA’s main inflation gauge surged to 8,6% last month, a near five-year peak, but the Reserve Bank is expected to keep interest rates steady when its policy meeting ends today, to help cushion the blow that power shortages will deal to the economy.

The annual rise in inflation measured by CPIX accelerated from 7,9% in November, surpassing forecasts and climbing further above its 3%-6% official target range for the ninth month in a row, Statistics SA said yesterday.

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