MPC held rates unchanged at 12%, citing a still worrying medium term inflation outlook as the reason for the hold, despite the troubling global outlook. The MPC did not discuss a rate cut at all during the meeting and this hawkish sentiment means that cuts are still not expected until early 2009.

The BER consumer confidence recovered to -1 for Q3, up from -6 in Q2. While this figure indicates a slight improvement, consumers are still worried about the slowdown in house prices, the sharp equity market falls and slower disposable income growth after the recent surge in interest rates within the Republic. This was reinforced by another main confidence indicator (the SACOB business confidence index) falling to 89.9, the lowest level seen in 5 years.

Against major trading partners the Rand continued its weak showing, now trading just under the 16 level paired with Sterling. Rand will continue to be knocked around in its major crosses as most of the action will be centred in Europe and America this week as further details of Government interventions are released and absorbed by the market. Commodity price fluctuations may add further volatility.

Major data this week from SA are building and retail statistics due out on Wednesday. Also, the ruling ANC and its allies are holding a party meeting from the 17-19^th where some drama is reasonably likely

Enjoy the Week

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