Guy Beitor News Today

Annual inflation eases to 3.8% ahead of Bank of Israel interest rate decision next week; war with Hamas expected to affect economy, dampen growth prospects

The CPI rose by less than expected in May, but residential rents were up 7.5% year-on-year, and the steepest rises could still be ahead.

Consumer price index surprises with lower-than-expected monthly figure of 0.2% versus analysts' expectations of 0.5%-0.6%

Consumer price index surprises with lower-than-expected monthly figure of 0.2% versus analysts' expectations of 0.5%-0.6%

The analysts' consensus sees the Bank of Israel raising the interest rate on Monday by 0.25% to 4.5% - a ninth consecutive rate hike.

A further increase in the interest rate may reduce the effects of inflation, but it will have a negative impact on the recipients of loans and mortgages.

To combat the ever-rising rate of inflation — which was last recorded at 5.1% as of October — the Bank of Israel will raise its interest rate on Monday.

Some analysts see the Bank of Israel Monetary Committee raising the rate by 0.75%, others by 0.5%.

Bank Leumi chief economist Gil Bufman expects the Bank of Israel to raise the interest rate by a further 0.5% to 2.5% at the Monetary Committee's next meeting on October 3.

The surprisingly high US inflation reading for May has led to expectations of more aggressive interest rate hikes.