Statement by Abigail Moyo, spokesperson of the trade union UASA:

 

The South African Reserve Bank's Monetary Policy Committee (MPC) increased the repo rate by 50 basis points today, double the expected number. This move hikes the repo rate to 7.75%.

This means most workers must be even more prudent with their finances. The banks will soon follow and hike the prime rate to 11.25%, the highest since 2009.

The implication on the cost of living will be considerable. UASA is deeply concerned about the affordability of the most basic and decent living.

The lower income groups and the poor – the very people the MPC wants to protect against a high consumer price index (CPI) – will be hardest hit. The increase, coupled with the economic outlook, will push many South Africans who were thus far able to cling to their lifestyles, over the edge and into poverty.

Consumers with a mortgage, car instalments and other loans to pay will feel the pain as disposable income shrinks.

Apart from a repo rate increase, South Africans must also deal with unspeakably high unemployment, power cuts, sky-high food and fuel prices, and constant higher-than-inflation increases in electricity and municipal tariffs.

UASA urges the government to consider reviewing and intervening in fuel levies, electricity, and municipal tariffs. With the economy contracting by 1.3%, as reported by Stats SA earlier this month, the situation is getting out of hand.

UASA encourages its members and fellow South Africans to keep their heads up and remain positive while keeping a keen eye on the effect of inflation and increased rates on their disposable income.

 

Issued by UASA