Israeli inflation beats all forecasts, highest since 2008
Israel’s annual inflation beat all forecasts as it accelerated to its highest level since October 2008, adding urgency to the central bank’s cycle of interest rate hikes.
Boosted by a rise in the cost of fresh fruit and transportation, prices unexpectedly jumped 5.2% a year in July from 4.4% in June, data showed on Monday. The median forecast in a Bloomberg poll of 15 economists was 4.6%.
Inflation has been stuck above the government’s 1-3% target since January. On a monthly basis, price growth hit 1.1% in July, nearly double the median forecast from another Bloomberg survey.
Israel‘s central bank has tried to get ahead of inflation by aggressively tightening monetary policy, making three consecutive rate hikes, including the largest since 2011. Its next meeting is a week away.
Israel’s inflation outlook was turning favorable after the shekel’s gains in recent weeks. But the currency depreciated sharply on Monday and was trading 1.3% weaker against the dollar at 7:09 p.m. in Tel Aviv.
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