There was a 5.3% increase in inflation in Israel in November, which put it at a new high of 14 years. This puts more pressure on the Bank of Israel to increase interest rates yet again in the next month.
There was a 0.1% in the consumer price index (CPI), which is a measure of inflation for tracking the cost of household items.
This was in accordance with expectations of analysts and pushed up inflation by 5.3% in the last 12 months, which had been 5.1% in October.
It was in October 2008 that annual inflation had touched 5.5% and this is the highest number to be recorded since then.
Back in July, it had hit a high of 5.2%. The cost of housing saw the fastest increase, as they increased by 0.6%, while there was an 8.1% increase in rental prices.
A 0.3% rise was also recorded in apartment maintenance and a 0.2% increase was seen in food. The Central Bureau of Statistics (CBS) revealed that there was a 1.5% drop in price of footwear, while prices of fresh fruit and vegetables shed 4.3%.
There has been a 5% increase in the CPI since the beginning of the year.
Despite such an increase, inflation in Israel is still significantly lower than most developed countries. There was a 7.1% increase in consumer prices in the US in November as opposed to a year earlier.
It was a decline from the 7.7% annual inflation in October and a whopping 9.1% in June. In November, the annual inflation was 10% in the 19 countries that have euro as their currency.
This was a drop from 0.6% a month earlier and the first decline since June last year. Therefore, it is not surprising that most countries are hiking interest rates in an attempt to bring down inflation.
Israel has also taken the same route, as the Bank of Israel increased the interest rates last month by 50 basis points, which took it from 2.75% to 3.25%.
This increase was the sixth one that the central bank has made since April, when the benchmark interest rate had been at a low of 0.1%, a level it had maintained for a year due to the COVID-19 pandemic.
The monetary policy committee of the Bank of Israel is scheduled to announce its next decision on January 2nd and it will also disclose macroeconomic forecasts.
In October, the researchers of the Bank of Israel had forecast a 6% economic growth for 2022 and 3% for next year, while annual inflation rate was expected to decline to 4.6% this year and 2.5% in the next.
According to the estimates and forecasts of the Bank of Israel, they expect inflation to start declining at the end of next year’s first quarter and then end up within the target range of the bank in the summer.
Most had expected the CPI figure to remain unchanged in the month of November, while some had predicted the 0.1% increase.