Israel Inflation Rate Seen Reaching 14-Year High of 4.5% In June

An Israeli flag flutters outside the Bank of Israel building in Jerusalem August 7, 2013.. REUTERS/Ronen Zvulun
An Israeli flag flutters outside the Bank of Israel building in Jerusalem August 7, 2013.. REUTERS/Ronen Zvulun
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Israel Inflation Rate Seen Reaching 14-Year High of 4.5% In June

An Israeli flag flutters outside the Bank of Israel building in Jerusalem August 7, 2013.. REUTERS/Ronen Zvulun
An Israeli flag flutters outside the Bank of Israel building in Jerusalem August 7, 2013.. REUTERS/Ronen Zvulun

Israel's inflation rate in June is expected to reach its highest level in nearly 14 years and maintain pressure on policymakers to keep raising interest rates aggressively.

The consumer price index (CPI) in June was likely 4.5% higher than a year earlier, according to a Reuters poll of economists. That inflation rate, up from 4.1% seen in
May, would equal the figure of November 2008.

The data will be issued on Friday at 2 p.m. (1100 GMT). Economists say an expected rise of 0.5% in June over May would reflect price gains of flights, fuel and housing rents, partly offset by declines for clothing and fresh fruit.

The central bank projects average prices in all of 2022 to be 4.5% higher than last year. The forecast for 2023 is only 2.4%.

Although the central bank says some price pressure stems from global supply issues and commodity prices, policymakers remain concerned over a very low jobless rate of 3%, which is
pushing up wages.

Meanwhile, consumer demand remains robust and should contribute to 5% economic growth this year.

The Bank of Israel last week raised its benchmark interest rate by a half-point to 1.25%, the highest since 2013. It was the third straight increase.

Analysts project another half-point rise at the next meeting, on Aug. 22, with the key rate likely reaching at least 2.75% by next year.

Annual inflation in June hit 9.1% in the United States and 8.6% in the euro zone.

"We are determined not to let it (inflation) get into the ranges (seen) in Europe and the United States, and more than that, to return it during 2023 to the target," Bank of Israel Governor Amir Yaron told a conference this week.

Yaron said the Bank of Israel was under less pressure and not keeping pace with the US Federal Reserve.



Honda, Nissan and Mitsubishi Drop Talks on Business Integration

This combination of pictures created on February 13, 2025 shows the logo of Honda Motor (L) taken on February 6, 2025 at the company's showroom in Tokyo and the logo of Nissan Motor (R) being displayed at the company's showroom in Tokyo on February 13, 2025. (Photo by Kazuhiro NOGI / AFP)
This combination of pictures created on February 13, 2025 shows the logo of Honda Motor (L) taken on February 6, 2025 at the company's showroom in Tokyo and the logo of Nissan Motor (R) being displayed at the company's showroom in Tokyo on February 13, 2025. (Photo by Kazuhiro NOGI / AFP)
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Honda, Nissan and Mitsubishi Drop Talks on Business Integration

This combination of pictures created on February 13, 2025 shows the logo of Honda Motor (L) taken on February 6, 2025 at the company's showroom in Tokyo and the logo of Nissan Motor (R) being displayed at the company's showroom in Tokyo on February 13, 2025. (Photo by Kazuhiro NOGI / AFP)
This combination of pictures created on February 13, 2025 shows the logo of Honda Motor (L) taken on February 6, 2025 at the company's showroom in Tokyo and the logo of Nissan Motor (R) being displayed at the company's showroom in Tokyo on February 13, 2025. (Photo by Kazuhiro NOGI / AFP)

Japanese automakers Honda, Nissan and Mitsubishi said Thursday they are ending talks on business integration.
Nissan Chief Executive Makoto Uchida said the talks had changed focus from setting up a joint holding company to making Nissan into a subsidiary of Honda, The Associated Press reported.
“The intent was to join forces to win in the global competition, but this was not going to realize Nissan's potential, so I could not accept it,” he told reporters. He said that Nissan was going to aim for a turnaround without Honda instead.
Honda Chief Executive Toshihiro Mibe said in a separate news conference that Honda had suggested a stock swap to speed up decision-making.
“I am really disappointed,” Mibe told reporters. “I felt the potential was great, but I also knew actions that would bring pain were necessary to realize that."
The automakers agreed to end their agreement regarding the consideration of the structure for a collaboration, a joint statement said.
Honda Motor Co. and Nissan Motor Corp. announced in December that they were going to hold talks to set up a joint holding company. Mitsubishi Motors Corp. had said it was considering joining that group.
From the start, the effort had analysts puzzled as to the advantages to any of the companies, as their model lineups and strengths overlap in an industry shaken by the arrival of powerful newcomers like Tesla and BYD, as well as the move to electrification.
Honda and Nissan initially said they were trying to finalize an agreement by June and set up the holding company by August.
The three automakers will continue to work together on electric vehicles and smart cars, such as autonomous driving, they said Thursday.
In recent weeks, Japanese media had various reports about the talks breaking down, citing unidentified sources. Some said Nissan balked at becoming a minor player in the partnership with Honda.
Mibe denied he knew or heard anything about the media speculation that Taiwan's Foxconn was considering taking a stake in Nissan.
Honda is in far better financial shape and was to take the lead in the joint executive team. Honda reported Thursday that its April-December 2024 profits declined 7% to 805 billion yen ($5 billion).
Nissan reported a loss for the July-September quarter as its vehicle sales sank, prompting it to slash 9,000 jobs. At that time, Uchida took a 50% pay cut to take responsibility for the results.