Israel's Inflation Holds Steady, Interest Rate Change Possible

Israel's inflation rate remained steady at 2.5% in October, prompting speculation about potential interest rate cuts by policymakers. As the figure aligns with the government's target range, the Bank of Israel, which has held rates for nearly two years, will decide on future adjustments by November 24.

Israel's annual inflation rate remained steady at 2.5% in October, as reported by the Central Bureau of Statistics on Friday. This stability may encourage policymakers to contemplate reducing interest rates later this month.

The Consumer Price Index (CPI) rose by 0.5% in October from the previous month, aligning with the 2.5% forecast in a Reuters poll, and remains within the government's 1%-3% annual target range. The Bank of Israel is set to deliberate on interest rates come November 24.

The bank has abstained from altering rates for nearly two years, largely due to the economic implications of the two-year Gaza conflict, which fueled inflation through supply constraints and necessitated an expansionary budget. However, tensions have eased following a U.S.-brokered agreement last month.

(With inputs from agencies.)