Eyewitness News: Money's too tight to mention!

Stephen Grootes | 03 April 2012
Economists have warned the combination of a fuel price spike, higher electricity and water costs, and the introduction of highway tolling will push food prices up in the next two months.

Petrol is increasing by over seventy cents at midnight, while Eskom's price hikes are scheduled to swell in April.

Government also plans to introduce tolls this month.

Personal finance journalist Maya Fisher-French says these hikes are different to other increases.

“These have no relation to inflation and no relation to our salaries. This is really going to take a bigger bite out of our salaries every month.”

Stanlib's Kevin Lings says this recipe will make a very real difference to food and other prices quite soon, pushing people to find other sources of income.

“Other sources of income could be personal loans, store credit [and] overdrafts. We are starting to see that pick up.”

Economists says the price hikes could all hoist inflation which will have further affects down the line.

WAGE INCREASE TALKS

One of the other knock-on effects of the various increases is that trade unions are likely to ask for higher wage hikes to cover the inflationary pressures.

Econometrix Treasury Management’s George Glynos says tougher talks with unions can be expected later in the year.

Teachers' union Sadtu has already called for an 10 percent pay rise for all government educators.

(Edited by Clare Matthes)

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Money's too tight to mention!

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