Picture: David Ritchie
JOHANNESBURG - South African households might be set for more financial pain with a hike in interest rates more likely after October's inflation rate increased by 5.1 percent from 4.9 percent - the highest inflation rate since July.

Statistics South Africa said the spike in inflation in the month was mainly driven by the cost of transport.

The South African Reserve Bank is likely to take a deem view on the headline inflation print, with it getting into the upper end of its 3-6 percent target range.

The central bank's monetary policy will make its last interest rate decision of the year tomorrow.  

Maura Feddersen, an economist at PwC, says changes in interest rates will require a sufficient time horizon for the required inflation limiting impacts to manifest    

"With inflation peaking in the second quarter of next year, the MPC faces a closing time window to increase interest rates as a way to keep inflation inside the target band," Feddersen says.

"The decision whether to embark on a hiking cycle in November, or delay to 2019, will likely be contentious among MPC members, with a unanimous decision unlikely."

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