Electricity, water price hikes pose risk to inflation outlook – central bank

Above-inflation increases to South Africa’s electricity and water prices pose a risk to the consumer inflation outlook and could trigger a rise in lending rates, the central bank said on Wednesday. “These risks, should they materialise, could drive headline above the 4.5% target midpoint and possibly dislodge inflation expectations away from the midpoint,” the bank said in its bi-annual Monetary Policy Review.