South African Consumer inflation higher than expected

PER FIN 24.com

Johannesburg - South Africa’s targeted consumer inflation quickened faster than expected to 6.0% year-on-year (y/y) in October from 5.7% in September, Statistics South Africa said on Wednesday. On a month-on-month (m/m) basis, inflation also accelerated slightly to 0.5% from 0.4% in September. Economists surveyed by Reuters expected the consumer price index to quicken to 5.9% on a y/y basis and slow to 0.35% m/m. Nedbank economist Carmen Altenkirch said inflation was expected to continue to rise. "Higher food and administered prices will remain the main drivers of inflation. The rand will be the wild card over the coming months. "If a credible plan is not found to resolve the European debt crisis, the rand could fall steeply as investors seek the security of so-called safe haven assets," she said.She said the 6% rise will not cause the Reserve Bank undue concern in the short term. "However, the bank will watch for signs that it is feeding through into higher wage demands and into more generalised inflationary pressures."