By Steven Scheer
JERUSALEM (Reuters) – Israel’s inflation fell in November, data from the Central Statistics Office showed on Sunday, but it remained above target and probably not enough to pressure policymakers to cut interest rates. interest in the short term.
The annual inflation rate fell to 3.4% last month, its lowest level since July, from 3.5% in October and after hitting a 10-month high of 3.6% in August. It was below expectations of 3.6% in a Reuters poll, but still above the government’s 1%-3% annual target range.
Government officials have largely blamed war-related supply problems for the rise in inflation last year, when price pressures eased globally.
The consumer price index fell a more than expected 0.4% in November compared to October due to lower costs for fresh produce, transportation, footwear, and education and entertainment. These were only partially offset by increases in the price of housing, food and clothing.
After cutting its benchmark interest rate in January, the Bank of Israel left the rate unchanged in subsequent meetings in February, April, May, July, August, October and November, citing geopolitical tensions, growing price pressures and a more flexible tax policy due to Israel’s tax policy. war with the Palestinian militant group Hamas.
The next rate decision will be on January 6. Israeli central bankers have warned of rate increases if inflation remains high. Prices of a number of goods such as water and electricity, as well as some taxes, are expected to increase in 2025.
“Today’s data alone reflects a different trajectory than what we were accustomed to in recent months,” he said. Mizrahi Tefahot (TASE:) Yonie Fanning, chief strategist of the bank.
“Even if we probably won’t get a local interest rate cut in January, we certainly expect a change in rhetoric in the interest rate announcement (towards less aggressive).”