Yesterday he flagged the fact that inflation has breached the top of its 3%-6% target range for three months in a row and warned of the likely effect on lending rates.

“It really means that interest rates are unlikely to come down and are more likely to go up,” he said in East London.

Mboweni’s latest comments capped a series of hints over the past week that interest rates may have to rise again this year to fight more generalised price pressures in the economy and inflation risks, which are “still strongly on the upside”.

The Bank has already raised its key repo rate a cumulative 2,5 percentage points to 9,5% over the past 14 months, but so far it has not slowed consumer spending or borrowing.

Mboweni said he was concerned that household debt had scaled a record peak of 76% of disposable income, while service costs were also rising and would be a problem “should interest rates go higher”.

SA “might see lots of insolvencies”, he said. “We’ll see lots of repossession of cars, houses ”.

Growth in private credit demand quickened to an annual rate of 24,9% in June from 24,8% in May — taking markets by surprise, as stricter lending regulations were imposed during the month, along with a half percentage point hike in interest rates.

The latest data for retail sales reinforces the idea consumers are still on a spending spree, surging by an annual rate of 9% in May after rising 5,9% in April.

“I don’t know what the MPC is going to decide,” Mboweni said yesterday. “I think it is more likely that … they will not cut rates, and that they will increase rates.”

The seven-member committee ends a two-day meeting next Thursday.

SA’s shortfall on the current account — the broadest measure of trade in goods and services — narrowed modestly to 7% of gross domestic product in the first quarter of this year, but is seen as the most vulnerable spot in its robust economy.