Consumer Inflation Expected To Accelerate Again

South African October CPI data will cross the wires at 08:00GMT/10:00SAST. Headline inflation accelerated to +5.4% in the previous month, and consensus looks for a further increase to +5.6%. Core inflation is expected to have cooled to +4.2% Y/Y.

• Bank of America expect inflation to print at +5.7% Y/Y on higher fuel and food prices. In their view, food prices may have been +8.8% Y/Y in October amid the bird flu outbreak. They expect CPI inflation to moderate in November on the decline in oil prices.
• Goldman Sachs write that headline inflation likely edged higher to+5.6% Y/Y. They think that petrol inflation likely increased to +9.7% Y/Y and food inflation was roughly unchanged at +8.1% Y/Y. They maintain a significantly more benign view of the South African inflation outlook than the SARB or market consensus for 2024.
• Nedbank see headline inflation steady at +5.4% Y/Y, with upward pressure emanating from fuel prices and food prices moderating off a high base.
• The data comes on the eve of a monetary policy decision from the SARB (see our preview here). Reminder that their tolerance band is +3.0%-6.0% Y/Y but they prefer to anchor inflation at the mid-point of the target.