The increase in South Africa's consumer price index excluding mortgage rate changes (CPIX) for metro and other areas, which is used by the South African Reserve Bank for its inflation target, was up 10.1 percent year-on-year in March from 9.4 percent year-on-year in February, Stats SA said on Wednesday.

CPIX was up 1.6 percent month-on-month after it increased 0.4 percent month-on-month in February.

CPIX was expected at 9.7 percent, an I-Net Bridge survey found, with forecasts ranging from 9.2 percent to 9.9 percent and from just 5.5 percent a year ago.

Adenaan Hardien, Cadiz African Harvest Asset Management:

"On the face of it this is not a good number, and confirms our view that there is certainly quite a high risk at this point for further tightening.

"Even though March is expected to be the peak, it confirms that for a while we will sit with inflation numbers well above the target range."

Mike Schussler, T-Sec:

"The nightmare continues. Inflationary pressures are growing. This is way above my expectation. It is not good news for the bond market, but it may help the rand with more people foreseeing another upward move in interest rates. It is a yield-driven market at the moment.

"Consumers are feeling battered and the new figures are not going to help interest rates. We are looking at least another interest rate hike.

"We have had more inflationary shocks than good news for the last year. It is knocking out the last remaining lights in our economy."

Dennis Dykes, Nedcor:

"It's a bit disappointing, and having drifted into double digits, psychologically that is not very nice. We expected 9.9 percent, so it was a bit above market expectations.

"Every time we get the headline number going up, inflation expectations rise, and when inflation expectations rise, we see rate hikes, so it doesn't look good for June."

Razia Khan, Standard Chartered Bank:

"CPIX races ahead, well beyond the three to six percent target and now in double digits.

"Although March is a busy survey month, this is still an exceptionally strong print with a 1.6 percent rise month-on-month. The pressure is on, and this does not even take into account any planned electricity tariff increases.

"Given the shock nature of the inflation release, expectations that the SARB may have to tighten interest rates again will be reinforced, although the state of the economy and evidence of earlier rate tightening having an effect are also important.

"The recent recovery in the currency will help to provide some (albeit moderate) counter impetus to the inflation trend, but with no particular reassurance that this can be sustained if global risk appetite deteriorates again.

"South Africa still faces a difficult time ahead."

Annabel Bishop, Investec:

"Today's publication of higher-than-expected CPIX inflation continues the previous trend which gradually extended the time period CPIX inflation was expected to regain its target range.

"Food, transport costs and education were the chief drivers, but with smaller inflationary pressures coming through from other items as well.

"We believe CPIX inflation is only likely to only fall back within the inflation target range in Q3.09, with today's figure the peak if Eskom does not get approval for an additional, substantial electricity tariff hike.

”Our official view is one of no change in interest rates in June, but much will depend on the pace of administered price increases and emerging second-round inflation effects."

I-Net Bridge