Macro Outlook

Rate increased 50bps to 6.00%; MPC met 24 & 25 Sep, announced 28 Sep, effective 29 Sep; unanimous - first hike since Nov 2022, ending the easing/hold cycle. Headline inflation at 7.9% (Aug), up from 7.5% (Jul) and 1.2% (Aug 2025) - third consecutive month above the target ceiling; core inflation 5.2% (Aug). Escalation of Middle East tensions and the Russia-Ukraine conflict worsened persistently high commodity prices; intensified El Nino cut crop yields, prolonging domestic agricultural inflation; emerging though still limited second-round effects on processed food and selected services; businesses 12-month inflation expectations rose to 7.3% (Jul) from 6.7% (Jun). Hike intended to limit second-round effects and keep elevated near-term inflation from becoming embedded in expectations. Headline inflation projected to return to the target range by mid-2027, with core inflation remaining elevated; international reserves a strong buffer against heightened geopolitical uncertainty with stable FX expectations.

CPI rose 1.5% — highest point-to-point reading (8.6%) since December 2022. Driven mainly by a 2.9% increase in the Food & Non-Alcoholic Beverages division on higher prices for agricultural produce: tomato, carrot, lettuce, pumpkin, Irish potato and sweet potato. CAPRI's Damien King linked the food pressure to agricultural shortfalls following Hurricane Melissa (landfall Oct 28, 2025) compounded by drought. Fifth consecutive month of rising consumer prices. P2P by division: Food & Non-Alcoholic Beverages 12.4% (Food alone 12.6%), Transport 14.6% — the fastest-rising division, with fuels/lubricants up 24.8% and passenger transport services up 15.4% on route taxi and hackney carriage fares. Annual inflation highest in Other Urban Centres at 9.2%. BOJ had raised the policy rate 50bps to 6.00% on Sept 28. Source: STATIN via Jamaica Gleaner / Jamaica Observer, October 15-16, 2026.