The April consumer price inflation read is the first clear indication of the domestic inflation and interest rate trajectory in the wake of the Iran war, and it is not good, folks.

South African consumer inflation raced to 4.0% year-on-year in April from 3.1% in March, a surge triggered by the hefty fuel price hike that month in the wake of the Iran war, with more pain for consumers and the economy lurking menacingly on the horizon.

Driven by a 1.1% monthly inflation spike, it's the first time the annual rate has breached 4.0% since August 2024, according to Statistics South Africa (Stats SA) data, and takes the read well beyond the Reserve Bank's 3.0% target.

The Bank's Monetary Policy Committee (MPC) will announce its next interest rate decision on Thursday, 28 May and it has strongly signalled that rates will go up before they come down again.

It may wait to get a measure on the second-round effects of the soaring fuel price and the trajectory of the Iran conflict before it hikes. At 4.0%, inflation remains at the edge of the 2.0% to 4.0% "tolerance band" around the actual target that is in place in case of short-term shocks which monetary policy can do little to counter.

"The Reserve Bank is naturally concerned that the sharp increase that we've seen in fuel prices will ultimately cause a broadening of inflation...