International oil prices reached new record highs last week, which do not bode well for local fuel costs.
Consumer demand is expected to remain fairly healthy in 2006, especially given the further tax relief announced in the annual budget.
There was some deterioration in inflation expectations, which probably drove overall confidence lower, but the decline is so small, it is not that significant.
I think it's safe to say that if the rain remains below average, then we won't see prices coming down much below current levels.
If ever there were any doubts that the (Bank) would this week do anything other than keep interest rates on hold, the December monetary aggregate numbers are likely to dispel the doubts.
