South Africa’s inflation increased further in August as CPIX reached 13.6% and headline CPI 13.7%. CPIX set a new record high, and has now been above the 3% to 6% target range for 17 months. Higher food prices were the main reason for the monthly increase in the index, but there were also notable increases in a number of other prices. Despite the sharp rise in the inflation rate in recent months, inflation should peak within the next few months. In the absence of further price shocks, the SARB is expected to keep rates stable during the rest of 2008.