Lowest inflation in nine years deepens Reserve Bank’s rate quandary

‘We need rate cuts, and even if it just supports sentiment or confidence it will help on the margins’The slowdown in consumer inflation to its lowest level since December 2010 is adding to pressure on the SA Reserve Bank to cut rates, with at least one economist arguing that it is making"a policy error" by keeping them unchanged.

Consumer price inflation slowed in November to 3.6%, Stats SA data showed on Wednesday, marking a year that it has been at or below the midpoint of the Bank’s target range of between 3% and 6%.A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, Morningstar financial data, and digital access to the Sunday Times and Times Select.

This could be a sign of deflation which is worse. Eg. Shoprite lost half its value in the last year or two and prices drop continually, items are no longer restocked. This is deflation. Be very scared of deflation.....

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