On Wednesday last week, Statistics South Africa (StatsSA) released the June consumer price index numbers. Headline inflation surprised the market by only increasing 5.5% year-on-year. Analysts are talking about monetary policy remaining looser for longer, while estate agents are sharpening their smiles. Some economists agree with the inflation-targeting policy and framework, others vehemently oppose it. What should be beyond debate is that the CPI 'basket' only has relevance to the richest 10% (or maybe 20%) of households. By PAUL BERKOWITZ.

The graph below represents the official inflation rate, from January 2009 to June 2013, derived from StatsSA's headline CPI figures. The shaded band refers to the Reserve Bank's inflation target of between 3% and 6%.

Officially, the inflation cycle peaked in 2008, although the highest inflation figure since 2009 was 8.6% in early-2009. After that, inflation fell steadily and re-entered the target range in early-2010. It stayed within the target range for the rest of 2010 and most of 2011, breaching 6% in late-2011. Until mid-2012 it remained just outside the target range, but since then it's remained below 6%.

In recent months inflation has threatened to rise above 6%...