Costs of production going up

Factory gate inflation accelerated for the eighth straight month in the year to March, slightly below expectations but showing factory gate price pressures are building after last year's recession.

Higher producer prices could start filtering through to consumer inflation, but this is unlikely to change the medium-term interest rate outlook after the Reserve Bank signalled last week that rates will stay on hold for a while.

Statistics South Africa said yesterday Producer Price Index, representing domestic output, quickened to 3.7% year on year in March from 3.5% in February, although it slowed to 0.3% from 0.4% on a monthly basis.