SA Investment Strategy | SA monetary policy: Remain UW SA consumer
We expect the MPC to announce an unchanged policy stance at the SARB monetary policy committee meeting on Thursday 28 March. The forecast itself is expected to be unchanged, with the possibility of a slight upward move over the middle part of the forecast period, as a result of higher electricity tariffs, higher petrol prices in March and April, and possible minor upward revisions to the international oil price assumptions. A lower starting point for the forecast is expected to moderate these increases. Although we do not expect further interest rate increases for some time, we remain UW SA consumer stocks (apparel retail, industrials) with negative real unit labour wage increases. If we strip out the impact of government, the nominal unit labour cost increases declined from 5.4% in 2017 to 2.5% in 2018.
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