Inflation slows but no rate cut seen in election week

Headline inflation slowed slightly in April, but analysts said an interest rate cut was unlikely next week when the Reserve Bank 's monetary policy meeting overlaps with the 29 May elections.Headline consumer inflation dropped to 5.2% year-on-year in April from 5.3% in March, Statistics South Africa data showed on Wednesday, whereas economists polled had predicted another reading of 5.3%.

The slowdown was driven by a decrease in annual inflation for food and non-alcoholic beverages, offsetting fuel price increases The South African Reserve Bank has tried to steer inflation back to the midpoint of its target band of between 3% and 6% by keeping its main interest rate at its highest level since 2009 for the past year.

Razia Khan, chief economist for Africa and the Middle East at Standard Chartered, said she did not expect much change in the bank's still-hawkish assessment of the inflation outlook. The Sarb said last month that the path back to 4.5% inflation would probably be"bumpy and protracted" due to setbacks in the disinflation trajectoryWho we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.

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