The increase in the consumer price index (CPI), which is used by the South African Reserve Bank (Sarb) for its inflation target, was up 6.1 percent year-on-year (y/y) in September from 6.4 percent y/y in August, Statistics South Africa (Stats SA) said on Wednesday.

CPI was up 0.4 percent month-on-month (m/m) after increasing 0.3 percent in August.

The consumer inflation index was expected to have receded slightly to 6.3 percent year-on-year (y/y) in September from the 6.4 percent increase in August, according to a survey of 13 leading economists by I-Net Bridge.

Forecasts among the economists ranged from 5.9 percent to 6.4 percent.

Efficient Group economist Dawie Roodt told Sapa: "It's a nice figure, but it's not going to last.

"While inflation might fall below six percent in a month's time, it'll soon be back above six percent again," he said.

Economists.co.za director Mike Schussler told I-Net that the figures were better than he had expected.

He said: "It's good news amid the bad news, but it doesn't change the interest rates outlook, especially given Eskom's plans.

"It is also good news for bond markets, but I think this is as low as we are going to go before we start picking up again next year."

KADD Capital economist Elize Kruger said: "Although positive on the day, the medium-term concerns about inflation, with specific reference to huge electricity tariffs and its possible secondary effect on inflation, will prevent the Sarb from cutting interest rates further."

Investec Group Economics economists Annabel Bishop said: "We have long held the view that the recession will result in lower inflation and continue to believe that CPI will fall below 6.0 percent in the fourth quarter of this year, due to recessionary pricing.

"The better than generally expected figure may make the MPC inflation forecast more benign, but we still don't believe it will ease monetary policy further at the next meeting, although the window for a December 50-basis-point rate cut is opening wider."

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