By Mark Phillips, Head of Portfolio Management and Analytics at PPS Investments

Annual consumer price inflation increased to 5.0% in June 2026, from 4.5% in May, mainly due to higher transport costs linked to supply disruptions in the Middle East. The outcome exceeded the Reuters consensus forecast of 4.7%. Key contributors included transport, housing and utilities, insurance, and financial services, while prices rose 0.7% month on month.

The June increase was driven largely by higher fuel and transport costs, alongside continued electricity tariff adjustments. The energy shock reflects heightened Middle East tensions, including disrupted peace agreements and risks to key global supply routes such as the Strait of Hormuz, leaving South Africa exposed to higher imported energy costs.

This release is the final inflation data point before tomorrow’s SARB Monetary Policy Committee announcement. The higher print is likely to keep policymakers cautious, although policy decisions remain anchored in the forward inflation outlook. For South African fixed income markets, the 5.0% June print reinforces a more hawkish tone and may delay expectations of near-term monetary easing.