Inflation To Moderate By H112

The Bank of Israel (BoI)'s July 25 decision to leave its headline interest rate unchanged at 3.25% falls in line with our view that rate hikes will come more slowly over the coming months (see our online service, June 29, 'Lower Inflation Expectations Pose Risks To Interest Rate Forecasts'). Indeed, although consumer price inflation remains far above the 1-3% per year target set by the BoI, inflation expectations over the next twelve months have recently fallen within that range.

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