Embattled consumers have some breathing space, but not mush, as rates are held at 10.5%.
Heavily indebted consumers worried about where their next meal will come from can breathe a sigh of relief as the Reserve Bank held rates steady.
A decision to hold interest rates comes as households continue to navigate an increasingly difficult financial environment, with higher prices, subdued wage growth and elevated debt levels squeezing disposable income.
The latest inflation figures showed consumer prices accelerated to 5% in June, driven largely by transport costs following higher fuel prices linked to the conflict in the Middle East. For many households, however, inflation is only the latest pressure in what has become a prolonged cost-of-living squeeze.
The decision came as “a genuine relief” for consumers after the May rate hike pushed the prime lending rate to 10.5%, says Kristof Kruger, head of fixed income trading at Prescient Securities. it also avoids placing additional pressure on already overburdened consumers and the economy, says Samuel Seeff, chairman of the Seeff Property Group.
