Russia's own tariff rise pushes inflation through 7% driving borrowing costs higher

Russia’s inflation has crossed 7% after the government indexed household utility tariffs on October 1, a rise postponed from its usual July schedule until after the Duma elections. The tariff increase, together with pressure in bond markets, is described as blocking further monetary easing while the Finance Ministry faces rising borrowing costs at the same time its funding needs increase. Consumer prices rose 0.96% during the week of September 29 to October 5, pushing annual inflation to 7.17%, with regulated services up 5.14% in that week. The economy ministry estimates the tariff hike alone added 0.75 percentage points. The Bank of Russia’s forecasts department confirmed the breach on October 14 and said the issue wasn’t only tariffs. The article also notes the central bank’s key-rate cuts to 14.00% and expectations of a hold on October 23.