Inflation goes up in August, signalling no short-term relief for households
The Reserve Bank might hike interest rates to control the prices of goods and services
In August 2026, South African consumer price inflation (CPI) rose to 4.4%, an uptick from 4.3% in July 2026. This indicates that despite fuel prices not causing a significant surge, the Reserve Bank (Sarb) may need to raise interest rates soon. Stats SA shared these figures on Wednesday. Food and non-alcoholic beverages (NAB) inflation rose for the first time in nine months, while alcohol, tobacco, and health indices fell month-on-month.
Fuel inflation, however, continued to ease. Standard Bank's Elna Moolman noted that cheaper petrol prices in August helped keep overall inflation in check, but further hikes in fuel prices in September and October suggest a challenging period ahead for South Africans. Moolman stated that most food categories saw price increases in August, with white rice prices falling from -11.6% to -10.8% and white bread rising from 3.2% to 3.9%.
Pork prices kept increasing, while beef prices remained in deflation since last year. Beef stewing, steak, and mince were more affordable than a year ago. Moolman warned that if September and October bring more fuel price hikes, the Sarb might raise interest rates again, either on September 23 or November 19, 2026, to keep inflation within the target.
Chief economist Johann Els from PSG Financial Services said the inflation data wouldn't affect the Reserve Bank's decision on Wednesday, as the Monetary Policy Committee (MPC) had already made its choice earlier. However, South Africans could see relief from higher interest rates next year when the Sarb begins lowering them in 2027.
Written by urgent.news from The Citizen's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
