South Africa's CPI to slows to 4 percent year/year in February

South Africa's CPI to slows to 4 percent year/year in February

South Africa's CPI to slows to 4 percent year/year in February

CPI inflation fell from 3.0% in January to 2.7% in February, according to the latest ONS data.

Britain's annual inflation rate slowed in February as food and transport costs rose by less than one year ago, official data showed on Tuesday.

"This fallback in inflation therefore provides little reason for the Bank of England to hold back from gradually raising interest rates", said Andrew Sentance, a former BoE rate-setter who is now an economic adviser with accountancy firm PwC. Higher interest rates achieve that by providing greater scope for rates cuts, and hence monetary stimulus if needed.

This left the consumer price index substantially above the BoE's 2% target and prompted the Bank to raise its interest rate for the first time in a decade during the same month.

South Africa's consumer prices climbed at the slowest pace in three years in February, Statistics South Africa reported Tuesday.

The figures suggest the squeeze on households, caused by rising inflation and stagnant wages, may be ending.

The Brexit-driven fall in the pound pushed up inflation over the last 18 months, but those effects are now slowing, and prices are rising more slowly.

The central bank bases its interest rate decisions on what inflation is likely to be six to twenty-four months in the future, instead of what it has come out recently at, Bishop added.

Commenting on the figures, Tom Stevenson, investment director for personal investing at Fidelity says: 'Inflation is easing from its recent peak of 3.1 per cent. February's reading of 2.7 per cent was slightly lower than expectations and 2.5 per cent for underlying inflation is in line with forecasts.

Food prices were also applying downward pressure, lifting 0.1 per cent between January and February in contrast to a 0.8 per cent rise the year before.

Sterling's slide since the Brexit vote has ratcheted up the pressure on household spending power, climbing from 0.6% shortly after the European Union referendum result to a near six-year high of 3.1% in November 2017.

"We are increasing the National Living Wage which is already helping the lowest earners see their pay rise by nearly 7% above inflation".

"Forecasters were expecting price increases to ease back this year".

"We think that the MPC will refrain from ratcheting up its guidance and won't clearly signal an imminent rate rise in the minutes of Thursday's meeting, prompting markets to reassess their view that the chances of a May rate hike are as high as 80%".

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