The Reserve Bank does not wish to impede the already weak recovery experienced by the local economy over the last couple of years. Gill Marcus wants to ideally wait for a signal that employment is increasing (i.e. that the unemployment rate is decreasing) and that tax collection are improving, before having to increase the interest rate. On the other side of the coin, the cost-push pressures such as rising food and fuel prices are threatening to force CPI above the 3-6% band preferred by the SARB. The longer term risks associated with high inflation are to be avoided, however, if need be, the SARB may tolerate inflation of say 7% for a short while if no signs of a sustainable recovery are evident. The key word here is “balance”. Balance between poor economic growth and uncontrolled price increases. The consequences of both evils being hardship and therefore social unrest amongst the poor & SA has far too many people who are vulnerable.