What is expected in the price index to be published today?
The consumer price index for October is expected to rise by 0.2%-0.4%, but the annual inflation rate may moderate. Bank Hapoalim estimates that the shekel's depreciation and political uncertainty are delaying an interest rate cut, while Meitav warns of renewed price pressures. Higher-than-expected inflation in the US also complicates the picture ahead of the interest rate decision in eight days.
The consumer price index for October, to be published this evening (Sunday) at 18:30, is expected to rise by 0.2%-0.4%, according to economists' forecasts. Despite the expected monthly increase, the annual inflation rate, currently at 1.6%, may actually decline due to the high base of comparison from October last year. Bank Hapoalim and Mizrahi-Tefahot forecast a 0.2% increase, while Meitav estimates the index will rise by 0.4%. The gaps reflect different assessments regarding the impact of holidays, flight prices, and seasonal price increases. Yoni Penning from Mizrahi-Tefahot expects a decline of about 4% in the flight category, which would subtract about 0.18 percentage points from the index. Modi Shafrir from Bank Hapoalim estimates that the chances of an interest rate cut have diminished due to the weakening shekel and political uncertainty. Alex Zabezhinsky from Meitav warns of renewed inflationary pressures, estimating that the impact of the shekel's depreciation on inflation outweighs the effect of falling oil prices. Inflation in the US, which rose in October by 0.4% above forecasts, also complicates the picture and increases the likelihood of a US interest rate hike, which could make it harder for the Bank of Israel to cut the local rate. The next Bank of Israel interest rate decision will be published on November 23.