Consumer Inflation – September 2026
| Category | Weight | MoM % | YoY % | ||
|---|---|---|---|---|---|
| Aug-26 | Sept-26 | Aug-26 | Sept-26 | ||
| Water supply and miscellaneous services | 3.8% | 0.8% | 0.2% | 7.2% | 7.4% |
| Electricity, gas & other fuels | 4.1% | -0.8% | 0.0% | 7.4% | 7.9% |
| Insurance & financial services | 10.4% | 0.0% | -0.4% | 5.7% | 5.4% |
| Transport | 13.9% | -0.4% | 2.0% | 8.8% | 10.8% |
| Food and non-alcoholic beverages | 18.2% | 0.1% | -0.1% | 1.1% | 1.2% |
| Housing and utilities | 24.1% | 0.0% | 0.5% | 5.2% | 5.2% |
| CPI excl. housing | 75.9% | 0.0% | 0.4% | 4.0% | 4.4% |
| Core inflation | 77.7% | 0.0% | 0.5% | 5.0% | 5.3% |
| CPI excl. food and non-alcoholic beverages | 81.8% | -0.1% | 0.6% | 5.1% | 5.3% |
| All items | 100.0% | 0.0% | 0.4% | 4.4% | 4.5% |
In September 2026, the Consumer Price Index (CPI) rose by 4.5% year on year. This was slightly higher than the 4.4% recorded in August, but below the market expectation of 4.7%. The main contributors to the increase were:
- Housing and utilities: rose by 5.2%, contributing 1.5 percentage points.
- Transport: rose by 10.8%, contributing 1.5 percentage points.
- Insurance and financial services: rose by 5.4%, contributing 0.6 percentage points.
Goods inflation rose to 4.4% in September 2026, from 3.3% in August. Services inflation was 4.9%, up from 5.1% in August 2026.
Goods inflation has once again moved above the South African Reserve Bank’s (SARB’s) new target range of 2% to 4%. Services inflation also remains above the upper limit of 4%. This suggests that services are currently the main channel through which inflationary pressures are entering the economy.
Rising inflation continues to erode household purchasing power in South Africa. Interest rates and fuel prices have also yet to return to their levels before the Middle East conflict. As a result, many consumers and businesses are increasingly relying on short-term credit, leaving them vulnerable to changes in interest rates, exchange rates, global oil prices, and import costs. These factors place further pressure on domestic prices.
These vulnerabilities have been compounded by the ongoing Middle East conflict and significant fuel-price increases between April and May, followed by further increases from August to September as the conflict escalated. The latest escalation has pushed international oil prices higher, reducing the likelihood of fuel-price relief in the coming month.
After its January 2026 meeting, the Monetary Policy Committee (MPC) kept interest rates unchanged, taking the latest inflation data and economic forecasts into account. At the end of May, however, the MPC raised the policy rate by 25 basis points in response to the inflationary spike linked to the Middle East conflict and higher international oil prices in April and May.
At its July meeting, the Reserve Bank again held interest rates steady, contrary to market expectations. By then, financial markets had largely priced in a 25-basis-point increase. The MPC raised interest rates again in late August 2026. The decision dealt a further blow to consumers already struggling with higher fuel and product prices, particularly as the economy contracted by 0.2% in the second quarter of 2026.
High fuel and transport costs are expected to continue shaping inflation expectations, particularly after September’s 4.5% inflation reading, which remains above the top of the target range. The Bank’s cautious approach is intended to support price stability amid ongoing domestic and international uncertainty. This includes higher tariffs imposed by the United States on South African exports, which have affected the manufacturing sector, as reflected in second-quarter 2026 GDP data. Recent data on unemployment, mining, and manufacturing have also added to uncertainty about the economic outlook.
International oil prices rose during the latter part of September, while inflation came in slightly below market expectations. Together, these developments may encourage the SARB to keep interest rates unchanged at the next MPC meeting. Previous interest-rate cuts—in late 2024, during 2025, and again in November 2025—were intended to stimulate demand by increasing household disposable income after interest payments and to support economic growth. However, rising fuel prices and a tighter monetary-policy stance could limit the effect of these measures on economic activity.
Despite the 0.2% economic contraction in the second quarter of 2026, the Bank remains cautious amid persistent global uncertainty. Inflationary pressures, the US–China tariff dispute and the possibility of further tariffs on BRICS nations could all affect price stability. The Middle East conflict could also keep international oil prices elevated if safe shipping through the Strait of Hormuz cannot be assured and the conflict lasts longer than markets expect.
Future interest-rate decisions are likely to reflect a range of factors, including inflation relative to the new target range, weak economic growth, improvements in electricity supply, positive market sentiment and the effect of international tensions on oil prices.
Maintaining price stability and protecting the value of the rand remain key priorities for South Africa as the country navigates the rest of 2026 amid ongoing international developments and uncertainty.
