Absa Property Trends: Housing market to show effect of higher interest rates
12 October 2007 | Investments | General | Absa
The Reserve Bank's Monetary Policy Committee (MPC) announced a hike of 50 basis points in the repo rate to 10,5%, prompting banks to raise their prime and mortgage rates to 14%. Interest rates have been hiked by a total of 350 basis points since mid-2006.
Inflationary pressures eased somewhat in August, with year-on-year (y/y) CPIX inflation marginally lower at 6,3% from 6,5% in July. Although these inflation numbers appeared to be positive for the interest rate outlook, rising food and energy prices remain a major concern and a threat to inflation in the near future. These developments, as well as aboveinflation wage increases, fuelled inflation expectations over the short term.
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