Four rate cuts in 2009?

Interest rates should ease in April next year, followed by three consecutive cuts of 50 basis points each, Standard Bank economist Danelee van Dyk said on Wednesday following the release of inflation figures.

Earlier Statistics SA said that CPIX inflation, which excludes mortgage costs, rose to a record 13% in July from 11.6% in June year-on-year.

Van Dyk said monetary policy decisions were expected to be based on an improved 18-month outlook, "despite the deterioration in the short term inflation profile".

While there were still uncertainties over the details of inflation targeting next year, the disinflation caused by the new inflation weightings, and the technical decline between December and January, "were adequate to secure early relief in interest rates".

Wednesday's CPIX figure was driven by higher electricity tariffs, housing costs, food and transport prices, said Van Dyk.

- Sapa