At our most recent meeting of the MPC in March interest rates were kept unchanged, with the committee, however, noting that the near-term inflation outlook had deteriorated, as it is subjected to upward pressure from the partial reversal of the recent petrol price declines, emerging upside pressures on food prices because of drought conditions, and the high risk of further electricity tariff increases.
This underscores that the timing of future interest rate increases would depend on the evolution of domestic and external factors and our understanding thereof. Let me now discuss some of the domestic and global factors that will have a bearing on the domestic outlook and policy response going forward.