Interest rates could be peaking, but fuel is on the up and pay on the down

THE Reserve Bank increased borrowing costs at a slower pace, suggesting interest rates are nearing a peak and the Bank is confident consumer inflation will return to the midpoint of the target range in the short term. Its monetary policy committee lifted the repo rate by 25

basis points to 7.25%.

PRODUCER inflation eased for the fifth month running in December, reflecting mainly a moderation in fuel prices in line with international oil prices. The producer price index, which measures changes in the prices of goods bought and sold by manufacturers, rose 13.5% year on year, beating the market’s forecast, Stats SA said.

IN a potentially gamechanging move, the National Treasury has allowed Cape Town to buy privately generated electricity from households and businesses. Mayor Geordin Hill-Lewis said it granted an exemption for the city to pay private users who sold their excess electricity to the grid. This was previously impossible due to limitations in public finance law.

FUEL is set to increase in February, said the Automobile Association. Commenting on Central Energy Fund data, it said petrol, diesel and illuminating paraffin would be more expensive, adding more financial strain to cash-strapped South Africans. The data shows an increase of about 52c/l for 95 unleaded petrol and 57c/l for 93 petrol, with increases of between 22c/l and 33c/l for diesel.

ECONOMIC activity dropped annually in November, affected by rolling blackouts, falling business confidence and an economic slowdown in South Africa’s key trading partners. The Reserve Bank’s composite leading business cycle indicator showed economic activity fell 2.8% against the same time in 2021.

AVERAGE take-home pay shrank in December, even without taking into account the effect of inflation on purchasing power. BankservAfrica, the largest automated payments clearing house on the continent, released its take-home pay index, which shows average nominal takehome pay slipped to R14,663, 4.8% lower than the previous year.