Will the SARB increase rates this month?

Will the SARB increase rates this month?

  • Yes, but by more than 50 bps

    Votes: 23 14.6%

  • Yes, 50bps is accurate estimate

    Votes: 103 65.2%

  • Yes, but by less than 50bps

    Votes: 23 14.6%

  • No

    Votes: 6 3.8%

  • Other

    Votes: 3 1.9%
  • Total voters
    158
Sinbad said:
You also can't control cost push inflation by decreasing money supply. That just leads to recession and stagflation. People are already cutting back on discretionary spending, but the inflation is driven by essentials.
Click to expand...
^that

What is currently being experienced in real life does not match what is being put forward by statisticians and economists in terms of inflation rates. Between the cost of fuel and basic necessities people are barely making ends meet.

Trying to drive down inflation by taking money out of the system is just the next step of a self fulfilling prophecy for recession.

Current inflation isn't being driven by consumer spending / pull. This is all push brought on by bad governmental policy (printing money), a global logistics failure and general uncertainty (war).

Stripping R500-R1000 from household budgets isn't going to do squat when it comes to bringing down inflation. Many households have already had more than that taken out of their budgets by just the increase in fuel prices alone the past few months and inflation is still climbing.

What will happen though is that households will be placed under more strain and cut back even further. Suppliers of non-essential goods and services will feel the bite first and forced into cost cutting or closure and further job losses.
 
Arzy said:
What will happen though is that households will be placed under more strain and cut back even further. Suppliers of non-essential goods and services will feel the bite first and forced into cost cutting or closure and further job losses.
Click to expand...
... Cost cutting measures and decreasing prices..

Its sad, but it works...
 
Arzy said:
^that

What is currently being experienced in real life does not match what is being put forward by statisticians and economists in terms of inflation rates. Between the cost of fuel and basic necessities people are barely making ends meet.

Trying to drive down inflation by taking money out of the system is just the next step of a self fulfilling prophecy for recession.

Current inflation isn't being driven by consumer spending / pull. This is all push brought on by bad governmental policy (printing money), a global logistics failure and general uncertainty (war).

Stripping R500-R1000 from household budgets isn't going to do squat when it comes to bringing down inflation. Many households have already had more than that taken out of their budgets by just the increase in fuel prices alone the past few months and inflation is still climbing.

What will happen though is that households will be placed under more strain and cut back even further. Suppliers of non-essential goods and services will feel the bite first and forced into cost cutting or closure and further job losses.
Click to expand...
At least the governor of the Bank of England gets it

https://twitter.com/x/status/1526217461040926722
 
richjdavies said:
... Cost cutting measures and decreasing prices..

Its sad, but it works...
Click to expand...
That's the thing though, prices aren't decreasing, there is a reduction in discretionary spend on luxury or non-essential items which is merely stabilizing the rate of inflation.

Prices of basic goods and essential items are still climbing.

Take maize for example:

www.cnbc.com

Price of corn hits 9-year high as surge in commodities continues

Corn was trading for more than $8 per bushel in the futures market on Monday, the highest price since 2012.
www.cnbc.com www.cnbc.com

The contracts for July corn futures were trading above $8 per bushel on Monday, the highest level since September 2012.

Corn is just one of several agriculture commodities that has seen surging prices in recent weeks, in part due to the war in Ukraine.

Even prior to the war, agricultural commodities were seeing some upward pressure supply chain disruptions and high transportation costs that are contributing to inflation throughout the economy.
Click to expand...

Tossing around with interest rates is going to do nothing to fix that.
 
Arzy said:
That's the thing though, prices aren't decreasing, there is a reduction in discretionary spend on luxury or non-essential items which is merely stabilizing the rate of inflation.

Prices of basic goods and essential items are still climbing.

Take maize for example:

www.cnbc.com

Price of corn hits 9-year high as surge in commodities continues

Corn was trading for more than $8 per bushel in the futures market on Monday, the highest price since 2012.
www.cnbc.com www.cnbc.com



Tossing around with interest rates is going to do nothing to fix that.
Click to expand...
It won't fix the inflation of essential items.. agreed. That's almost the meaning of essential. Stuff you still buy even if you have less money...

Most of the basket of goods is not essential though. And those people who pay interest (those with good credit, homes etc.) even more so...

Sorry to say it but this correction is long overdue
 
richjdavies said:
It won't fix the inflation of essential items.. agreed. That's almost the meaning of essential. Stuff you still buy even if you have less money...

Most of the basket of goods is not essential though. And those people who pay interest (those with good credit, homes etc.) even more so...

Sorry to say it but this correction is long overdue
Click to expand...

The problem in South Africa is that people use credit to buy essentials. You are physically taking food out of people's mouths by increasing interest rates.

For consumers in the lowest income bracket, earning less than R5,000 a month, the debt exposure to net income ratio has increased from 56% in 2016 to almost 80% in 2022.
Click to expand...

www.businessinsider.co.za

Business Insider - Latest News in Tech, Markets, Economy & Innovation

Business Insider tells the global tech, finance, stock market, media, economy, lifestyle, real estate, AI and innovative stories you want to know.
www.businessinsider.co.za www.businessinsider.co.za

Carrying on in this manner isn't just placing us at risk of recession but rather civil unrest because people are hungry.
 
Arzy said:
The problem in South Africa is that people use credit to buy essentials. You are physically taking food out of people's mouths by increasing interest rates.



www.businessinsider.co.za

Business Insider - Latest News in Tech, Markets, Economy & Innovation

Business Insider tells the global tech, finance, stock market, media, economy, lifestyle, real estate, AI and innovative stories you want to know.
www.businessinsider.co.za www.businessinsider.co.za

Carrying on in this manner isn't just placing us at risk of recession but rather civil unrest because people are hungry.
Click to expand...

And if rates dropped.... people are smiling and complaining? Its time to push rates up
 
Arzy said:
The problem in South Africa is that people use credit to buy essentials. You are physically taking food out of people's mouths by increasing interest rates.


Carrying on in this manner isn't just placing us at risk of recession but rather civil unrest because people are hungry.
Click to expand...
But the people is getting a 100m high flag, how can they not be happy?
 
Arzy said:
^that

What is currently being experienced in real life does not match what is being put forward by statisticians and economists in terms of inflation rates. Between the cost of fuel and basic necessities people are barely making ends meet.

Trying to drive down inflation by taking money out of the system is just the next step of a self fulfilling prophecy for recession.

Current inflation isn't being driven by consumer spending / pull. This is all push brought on by bad governmental policy (printing money), a global logistics failure and general uncertainty (war).

Stripping R500-R1000 from household budgets isn't going to do squat when it comes to bringing down inflation. Many households have already had more than that taken out of their budgets by just the increase in fuel prices alone the past few months and inflation is still climbing.

What will happen though is that households will be placed under more strain and cut back even further. Suppliers of non-essential goods and services will feel the bite first and forced into cost cutting or closure and further job losses.
Click to expand...
What is worse, is that increasing interest rates will actually make inflation worse.

Right now I have zero margins in my business to absorb any increase in any input cost. So if the cost of servicing debt goes up, that increased cost will be pushed straight through to the end consumer adding to inflation. Now look at all the businesses in the value chain of a product, and you can see how interest rates in the current economic climate does not work.
 
Arzy said:
^that

What is currently being experienced in real life does not match what is being put forward by statisticians and economists in terms of inflation rates. Between the cost of fuel and basic necessities people are barely making ends meet.

Trying to drive down inflation by taking money out of the system is just the next step of a self fulfilling prophecy for recession.

Current inflation isn't being driven by consumer spending / pull. This is all push brought on by bad governmental policy (printing money), a global logistics failure and general uncertainty (war).

Stripping R500-R1000 from household budgets isn't going to do squat when it comes to bringing down inflation. Many households have already had more than that taken out of their budgets by just the increase in fuel prices alone the past few months and inflation is still climbing.

What will happen though is that households will be placed under more strain and cut back even further. Suppliers of non-essential goods and services will feel the bite first and forced into cost cutting or closure and further job losses.
Click to expand...
This has generally been true of inflation in South Africa for a long time. Most of the causes are usually external and outside of the country's control. Interest rates don't and can't do much. In South Africa's case raising interest rates is mainly about signalling that inflation is being taken seriously.
 
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