October's 4.4 percent CPIX inflation figure has neutralised the risk of interest rate hikes in the near future, economists said on Wednesday.

"I think the chances of interest rates going up in December or any time soon have probably been reduced to zero," Tradek economist Mike Schussler said.

Nico Kelder from the Efficient Research group said the better-than-expected CPIX figure had caused chances of an interest rate increase to "fly out the window".

"In fact, I think we are probably looking at reductions next year if the rand and the oil price play along."

Absa senior economist John Loos believed the latest inflation figures "almost eliminates" the risk of an imminent interest rate hike.

"It is quite clear that economists have been over-forecasting CPIX inflation," he said.

CPIX, consumer price inflation minus mortgage costs, is monitored by the SA Reserve Bank to set interest rates. The inflation target is at between three and six percent.

Schussler said October's figure was the 15th time in the past 20 months that inflation had come in below market expectations.

It was quite possible that inflation for the year would be lower than expected too.

Second-round effects from high international oil prices were not filtering through with South Africa's growing economy countering inflationary pressures.

Ninety percent of the country's inflation was being driven by oil prices, he said.

Kelder said the 4.4 percent figure was better than could have been expected in a month which saw a local fuel price increase.

According to Loos, South Africa's competitive economy was neutralising traditional inflationary pressures like strong consumer demand.

He expected November's CPIX figure to come in at around four percent, with December's number not far from that. "I think inflation is very much under control."

Statistics SA earlier said CPIX dropped to 4.4 percent last month from 4.7 percent in September.

It attributed the year-on-year rise mainly to increases in the price indices for transport, food, housing, medical care and health expenses, household operation and education.

Stats SA said the headline or official inflation rate (CPI) was four percent in October, down from 4.4 percent in September.

The month-on-month dip could be attributed to lower rates of increase in the price indices for cigarettes, cigars and tobacco (down from 11.7 percent to 9.2 percent); fuel and power (from 4.5 percent to 3.6 percent); food (from 3.4 percent to 2.6 percent) and housing (from 1.8 percent to 1.5 percent).

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SA's official statistics body produces a number of key indicators, including monthly inflation and quarterly GDP figures, unemployment and population counts.

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