The better-than-expected July figure for the consumer price index (CPI) is good news on the inflation front for business and consumers and helps to stabilise medium-term expectations.

In commenting on the CPI figures for July, Prof. Raymond Parsons, economist from the North-West University (NWU) Business School, says the consensus view among analysts has been that, although the global energy crisis would mean a temporary surge in headline inflation earlier in 2026, the effects would gradually dissipate later in the year.

“However, core inflation edged up slightly to 4,2%, which suggests that price pressures remain sticky. The ‘higher-for-longer’ Monetary Policy Committee (MPC) interest rate stance is likely to persist for now, but it is possible that, at its meeting end-September, the MPC will now see the inflation outlook and inflationary expectations as manageable within its 2% to 4% target range.”

According to Prof. Parsons, in that event, there is a good chance that interest rates will again be left unchanged.

“The MPC will want to see several consecutive months of lower inflation before shifting towards monetary easing. With an economy that grew at 0,5% in the first quarter of 2026, that reflects an ambivalent investment outlook, and that has an unemployment rate of 33,6%, the MPC needs to remain nimble in its monetary policy decision-making,” he concludes.