Consumer inflation in South Africa accelerated to 5% year-on-year in June, up from 4.5% in May, according to data released on Wednesday.This surge, driven primarily by transport costs (12.7%) and housing and utilities inflation, has intensified pressure on the South African Reserve Bank (Sarb) to consider another interest rate hike.

The Bank's policy meeting on Thursday faces heightened scrutiny as inflation remains above its 2% to 4% target range for the second consecutive month.

Governor Lesetja Kganyago emphasized the urgency of acting promptly to prevent entrenched inflation expectations, noting that delays could risk long-term economic stability.The rise in inflation coincides with global oil price volatility, as tensions between the US and Iran disrupt supply chains.Oil prices surged to six-week highs amid fears of further supply disruptions, compounding concerns about fuel costs.The Bank's previous rate hike to 7% in May followed a sharp inflation spike to 4% in April, driven by fuel prices.

Analysts warn that prolonged high inflation could erode purchasing power and strain household budgets, particularly in a context of rising living costs.

The Sarb's decision will balance immediate inflation control with potential impacts on economic growth, reflecting the complex challenges of monetary policy in a volatile global environment.