Interest Rate Increase Adds to Mounting Cost Pressures on Consumers

The National Automobile Dealers’ Association (NADA) says the South African Reserve Bank’s decision to increase interest rates adds another burden to household budgets already strained by sharply higher fuel and living costs.

The Monetary Policy Committee today increased the policy rate by 25 basis points to 7.25%, with the prime lending rate consequently moving to 10.75%.

The increase comes as consumers continue to contend with elevated living and mobility costs. Headline consumer inflation edged up to 4.4% in August from 4.3% in July, adding to an affordability environment already shaped by sharply higher fuel and household costs.

“While we understand the inflationary pressures behind the decision, another increase in borrowing costs is difficult news for consumers, particularly when affordability is already influencing vehicle purchasing decisions,” says Brandon Cohen, Chairperson of NADA.

The Competition Commission’s latest Cost of Living Report…