Inflationary pressures continued to moderate in June, with headline consumer price inflation (CPI) declining to 5.1% from 5.2%, which is in line with Bloomberg’s consensus forecast. Core inflation receded to 4.5% from 4.6% and was lower than consensus at 4.6%. While the monetary policy committee (MPC) flagged concern about rising services inflation, specifically rentals, June’s outcome shows price increases continued to abate in food price inflation, which moderated to 4.1% from 4.3%. Fuel price inflation declined to 7.6%, in line with expectations following the R1.05c/l decline in the fuel price. The MPC decided to keep the repo rate on hold at the July MPC meeting, keeping markets waiting for much-needed decrease in interest rates.
