Israel’s inflation slips to 4-month low of 3.4% in November By Reuters

By Steven Scheer

JERUSALEM (Reuters) – Israel’s inflation fell in November, Central Bureau of Statistics data showed on Sunday, but the fact that it remains above target is probably not enough to push policymakers to cut interest rates any time soon.

The annual inflation rate fell to 3.4% last month, its lowest level since July, after reaching 3.5% in October and a 10-month high of 3.6% in August. fell. It was below expectations of 3.6% in a Reuters poll but still exceeds the government’s annual target range of 1%-3%.

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 declines in fresh produce, transportation, footwear, education and entertainment costs. These were only partially offset by increases in housing, food and clothing prices.

The Bank of Israel, which reduced the benchmark interest rate in January, kept the interest rate unchanged in its meetings in February, April, May, July, August, October and November, citing geopolitical tensions, increasing price pressures and the looseness in Israel’s fiscal policy. War with the Palestinian militant group Hamas.

It will then make its decision on interest rates on January 6. Israeli central bankers warned of interest rate hikes if inflation remains high. Prices of a number of products such as water and electricity, as well as some taxes, are expected to increase in 2025.

“Today’s data alone reflects a different trend than what we are used to in recent months,” he said. Mizrahi Tefahot (TASE:) Bank chief strategist Yonie Fanning.

“Even though we probably won’t get a local rate cut in January, we certainly expect the rhetoric in the interest rate announcement to change (to a less hawkish one).”