Reserve Bank is expected to increase interest rates: Economists

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Some economists say the Reserve Bank is expected to increase interest rates when it announces the outcome of its monetary policy committee on Thursday afternoon. This as the cost of living continues to increase.

The Consumer Price Index, measuring the rate of price changes, remained elevated in April at 5.9% year on year.

Food, housing, utilities and transport were the main contributors.

FNB economist Koketso Mano says the knock-on effects of the Russia-Ukraine conflict are concerning.

“Food and alcoholic beverages have also continued to accelerate, now sitting at 6% on a year-on-year basis and the monthly pressure is at 0.7%. Net inflation has contributed, we also see oils and fats to be heavily related to what we are seeing internationally, given that Russia is one of the big suppliers of our palm oil and so we see that pressure coming through there as well and it’s unfortunate that going forward we continue to see inflationary pressures and you would know that current under-recovery petrol prices are under-recovery and that only adds and all of that together means June is going to be a steep month.”

The CEO of 3Sixty Global Solutions Group, Khandani Msibi, says the inflation of 5.9% is devastating.

Msibi says citizens are in a very difficult position: