Israel inflation rate steady at 1.2 percent in September

Israel’s annual inflation rate rose for the 13th straight month in September, data from the Central Bureau of Statistics showed on Monday, holding steady from August and remaining within the government’s target range.

In June inflation had moved above the 1 percent level for the first time in more than four years.

The consumer price index <ILCPIY=ECI> showed prices gained 1.2 percent from a year earlier, the same as in August.

Inflation in 2017 was 0.4 percent, as prices in the full year rose for the first time since 2013.

Compared with August, consumer prices <ILCPI=ECI> edged higher by 0.1 percent in September led by price gains in housing rentals, fresh produce, food, furniture and health care and offset by declines in cars, food and clothing, education, culture and entertainment and transport and telecoms costs.

Expectations that inflation would stay below the government’s 1-3 percent target in the near term drove the Bank of Israel to cut benchmark interest rates in early 2015 to 0.1 percent from 0.25 percent.

The bank has since held the rate steady and projects an inflation rate of 0.8 percent in 2018, which was revised down last week from a previous estimate of 1.2 percent.

The bank’s next rate decision is scheduled for November 26.

Bank of Israel economists believe the benchmark interest rate will start rising in the first quarter.

Central bank chief Karnit Flug has said rates likely will not rise until inflation is entrenched within its target range.

JERUSALEM (Reuters)

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