By Anita Dangazele
- Prices rose 5% in the year to June, the fastest pace in two years, mostly because of higher fuel and transport costs.
- The Reserve Bank kept interest rates unchanged this week, which helps people paying off a home loan or car, but does little for renters or informal workers.
Prices went up faster in June than they have in two years. Stats SA says the cost of everyday goods and services rose 5% compared to a year ago, up from 4.5% in May.
This is called inflation, it measures how much more expensive things get over time.
The biggest reason prices rose was fuel and transport. Petrol and diesel have gone up because of conflict overseas that’s pushed up the international price of oil. Food, on the other hand, actually stayed calmer than usual this month, thanks to a good harvest that kept crop supplies high.
A day after that news came out, the Reserve Bank made its own decision: it chose not to raise interest rates. The rate stayed at 7%, meaning the extra amount banks charge on loans stays the same too.
Here’s the part that matters most for many readers: this decision mostly helps people who already have debt, a home loan, a car loan, a store account. If you have one of those, your monthly payment stays the same instead of going up. If you rent your home, use cash, or don’t have a bank loan, this decision does very little for you directly. Your rent, your taxi fare, your electricity bill, and your groceries can all still go up, none of those are controlled by the Reserve Bank’s decision.
So when you hear “good news, interest rates didn’t rise,” it’s true, but it’s mainly good news for people with debt.
For everyone else, the real pressure this month is coming from higher fuel prices, which push up the cost of getting food and goods to the shops, and from municipal and electricity bills that keep climbing regardless of what the Reserve Bank decides.
Pictured above: Everyday prices rose at their fastest pace in two years in June.
Image source: File
