Israel inflation rate jumps to new 14-year high of 5.2% y/y in July (updated)

CPI SA

15/08/2022 17:12

(Adds details, shekel reaction)
    By Steven Scheer
    JERUSALEM, Aug 15 (Reuters) - Israel's annual consumer price
index (CPI) rose to a higher than expected rate of 5.2% in July,
the most since October 2008 and following a 4.4% rate in June,
as more aggressive interest rate hikes loom and keep the soaring
cost of living centre stage ahead of an election in November.
    A Reuters poll of analysts had projected an inflation rate
of 4.6%. CPI rose 1.1% in July from June, led by gains in
transport, housing rentals and fresh fruit, the Central Bureau
of Statistics said on Monday.
    The Bank of Israel meets next Monday and is widely expected
to raise its benchmark interest rate  ILINR=ECI  by another half
point to 1.75% after a similar move a month ago. Policymakers
have raised the rate from 0.1% in April and a rate of around 3%
is expected by next year in a bid to clamp down on inflation.
    Policymakers have blamed much of the inflation spike on
supply chain disruptions, gains in oil and other commodities
prices and a weaker shekel, as well as rising domestic demand
and a full-employment economy with wage pressures in most
private sector industries. The jobless rate rose to 3.7% in July
from 3.4% in June, official data showed on Monday.
    Inflation in Israel is still far below rates of 8.5% and
8.9% in the United States and Euro bloc, respectively, but with
prices rising rapidly and anger among Israelis growing, the
issue of cost of living has become a main issue for candidates
running in the Nov. 1 general election. 
    A survey by the Israel Democracy Institute showed that 44%
of Israelis think that the parties’ platforms on economic issues
and their plans to bring down the high cost of living are
currently the number one factor in deciding which party to vote
for.
    The shekel  ILS=  appreciated to 3.26 per dollar from a 3.28
rate after the CPI was published.

 (Reporting by Steven Scheer; Editing by Hugh Lawson and Grant
McCool)
 ((steven.scheer@thomsonreuters.com; +972 2 632 2210; Reuters
Messaging: steven.scheer.thomsonreuters.com@reuters.net;
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