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Israel’s CPI rose to a 10-month high of 3.6% in August By Reuters

JERUSALEM (Reuters) – Israel’s inflation rate rose in August to the highest rate in nearly a year, data from the Central Bureau of Statistics showed on Sunday, reducing the likelihood of more interest rate cuts soon.

The annual rate of inflation rose to 3.6 percent last month from 3.2 percent in July, the highest level since last October. It was well above expectations of 3.2 percent in a Reuters poll and well above the government’s annual target range of 1-3 percent.

Government officials have largely blamed war-related supply problems for the rise in inflation.

The consumer price index rose 0.9 percent more than expected in August from July, supported by higher costs of fresh produce, food, housing, transportation, education and entertainment. These were only partially offset by declines in clothing and footwear, telecommunications and furniture.

© Reuters. FILE PHOTO: A man wearing a mask shops at a food market in Tel Aviv, Israel March 15, 2020. REUTERS/Corinna Kern/File Photo

After cutting its benchmark interest rate in January, the Bank of Israel left the rate unchanged at subsequent meetings in February, April, May, July and August, citing geopolitical tensions, rising price pressures and looser fiscal policy due to Israel’s war with the Palestinians. militant group Hamas.

Next, it decides on the rates on October 9. Israeli central bankers have said they do not expect rate cuts until 2025.

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