Israel inflation steady at 3.5% in October, stays above target

ISRAEL’S inflation rate held steady in October, data from the Central Bureau of Statistics showed on Friday (Nov 15), staying above target and unlikely to push policymakers to reduce interest rates anytime soon.

The annual inflation rate held steady at 3.5 per cent last month, after hitting a 10-month high of 3.6 per cent in August. It was in line with expectations of 3.5 per cent in a Reuters poll and exceeds the government’s 1 per cent-3 per cent annual target range.

Government officials have largely blamed war-related supply issues for the spike in inflation.

The consumer price index rose 0.5 per cent in October from September led by higher costs of transport, clothing and footwear, food and healthcare. These were only partly offset by declines in prices of housing and entertainment.

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

It next decides on rates on Nov 25. Israeli central bankers have warned of rate hikes should inflation remain high. REUTERS