Consumer inflation dropped sharply in October to 2,8%, from 3,8% recorded in September. This is the lowest inflation rate since June 2020 (during the COVID-19 pandemic) when the rate was 2,2%.

This bodes well for the meeting of the Reserve Bank’s Monetary Policy Committee this week, who are set to announce another interest rate cut on Thursday, 21 November.

ALSO READ: More interest rate relief on the cards for consumers

Statistics South Africa says falling fuel prices remain the primary factor behind the slowdown in consumer inflation.

Petrol and diesel prices declined by 5,3% between September and October, taking the annual rate for fuel to -19,1%. The price for inland 95-octane petrol in October was R21,05, the cheapest since February 2022 when the price was R20,14.

After remaining steady for six months in the 4,5–4,7% range, annual inflation for food & non-alcoholic beverages (NAB) retreated to 3,6% in October. This is the lowest rate since November 2019 (3,5%).

Inflation cooled for most food & NAB subcategories in October, except for sugar, sweets & desserts and cold beverages.

The price index for bread & cereals declined by 0,5% between September and October, dragging the annual rate down to 4,6%.

A range of bread and cereal products was cheaper in October compared with September. Most notably, maize meal prices decreased by 2,0%, representing a third consecutive month of decline. Consumers also paid less on average for other key products such as spaghetti, macaroni, rice and samp.

Annual inflation for milk, eggs & cheese dipped steeply to 4,1% in October from 6,9% in September. The monthly rate was -0,2%, with price decreases recorded for milk products, yoghurt, and cheddar cheese. Bucking the trend, prices for custard, sour milk, eggs and mageu were higher in October compared with September.

Sugar, sweets & desserts recorded an annual rate of 6,9%, which is significantly lower than the recent high of 18,5% recorded in February this year. The price index for the category rose by 1,0% between September and October, with chocolates, jam and white sugar recording relatively large increases.

Although hot beverages continued to register the highest inflation print among all food & NAB categories (at 14,1%), the rate has eased from 17,6% in July. The monthly rate was 0,8% in October, with notable price increases for instant coffee, drinking chocolate and black tea. Cappuccino sachets were slightly cheaper in the month.

The index for cold beverages rose by 1,1% between September and October, taking the annual rate from 5,7% to 7,0%. Prices for fizzy drinks and mineral water witnessed large monthly increases. Dairy blends and fruit juice concentrates, however, were cheaper.