CBS: CPI at 0% in September

The September CPI follows an unexpectedly high 0.8% increase in August. Inflation so far this year is well above the cabinet and Bank of Israel's target of 1% to 3%
 
The Central Bureau of Statistics (CBS) announced last week that the September consumer price index, was unchanged at 0%. The CPI figure is a surprise, since a rise of about 0.3% - 0.4% had been widely expected.
 
Following the publication of the September index a senior government economic official noted that as a result, Bank of Israel governor Stanley Fischer, who only few days ago cut interest rates by 0.5% in a surprise move, is expected to lower rates once again this month by additional 0.25% or even 0.5%.
 
The September CPI follows an unexpectedly high 0.8% increase in August. Inflation so far this year is well above the cabinet and Bank of Israel's target of 1% to 3% for all of 2008.
 
Following the September CPI inflation is seen to be on a downward trend in the past three months, which paves the way for a further interest rate cut by the Bank of Israel at the end of this month.
 
Ori Yehudai, chairman of the Manufacturers Association Economics Committee, said that given the global economic crisis, rising prices were not a threat to the Israeli economy, and that the Israeli government should embark on a combined fiscal and monetary plan to restore confidence to the markets and prevent a slide into recession.