October Inflation Data Due; Interest Rate Decision Looms
Translated & summarized from Ice by baba
Israel's Central Bureau of Statistics will release the October consumer price index on Sunday evening, with forecasts indicating a 0.2% to 0.5% increase. Despite a potential moderation in annual inflation, a weaker shekel and deficit concerns make an interest rate cut unlikely next week. The Bank of Israel's Monetary Committee will consider this data before its November 23 decision, with the current interest rate at 3.25%.
The story in 5 lines · by baba
- October CPI data is expected to show a 0.2% to 0.5% increase.
- Annual inflation may moderate, but rate cut unlikely due to weak shekel.
- The Bank of Israel's interest rate currently stands at 3.25%.
- The Monetary Committee will decide on the interest rate on November 23.
- Holiday travel and winter clothing collections likely increased October prices.
The Central Bureau of Statistics is set to release the October consumer price index (CPI) on Sunday evening, with forecasts predicting a 0.2% to 0.5% increase. This rise is expected to moderate the annual inflation rate compared to the previous year. However, a weakening shekel and concerns over a widening deficit diminish the likelihood of the Bank of Israel lowering its interest rate next week. In September, the CPI fell by 0.5%, bringing the annual inflation rate to 1.6%, at the lower end of the Bank of Israel's 1% to 3% target. Last October, the index rose by 0.5%. Holiday travel and leisure costs, particularly flights, contributed to the expected October increase, as did the transition to winter clothing collections. Modest price hikes are also anticipated in food, mainly due to rising vegetable costs, though a decrease in fuel prices may temper the overall index rise. The upcoming CPI data will be the final inflation figure considered by the Bank of Israel's Monetary Committee before its interest rate decision on November 23. The current interest rate stands at 3.25%, following three consecutive reductions. Market expectations suggest the bank will maintain the current rate in its upcoming decision.
