Some economists believe Reserve Bank on track to cut borrowing costs in January

JOHANNESBURG - Some economists believe the Reserve Bank is still on track to cut borrowing costs in January, despite a marginal uptick in the annual inflation rate.

Inflation increased to 2.9% in November, up from 2.8% in October.

The inflation print is still below the Reserve Bank’s target band of 3 and 6%.

Going into the New Year, inflation is expected to drift higher again, lifted by food and fuel prices.

READ: Food inflation drops to 14-year-low, giving consumers breathing room

Despite some risks, economists at Nedbank believe inflation will hover around the Reserve Bank’s midpoint of 4.5%.

FNB’s senior economist Koketso Mano said, "As it stands right now, the fundamentals suggest that there is some space for cutting interest rates, we just think they’ll do it gradually, rather than faster but the interest rates are still coming.”