Singapore inflation rises to 2.2% amid energy cost spikes

Singapore's headline inflation has risen to 2.2%, the highest level since August 2024. Core inflation also saw an increase, climbing from 1.6% to 2.0% year-on-year in July. A primary driver of this spike was the electricity and gas category, where inflation swung from -2.9% to +8.7% due to a 17% jump in regulated household electricity tariffs.

This inflationary trend presents challenges for cash savers, as recent 6-month T-bill auctions yielded only 1.56%, falling below the current inflation rate.

In the broader local market, the Straits Times Index (STI) has seen significant performance driven largely by the banking sector, specifically DBS, OCBC, and UOB. While these banks have benefited from rising rates, the iEdge S-Reit Index has declined by 2.5% this year as rate volatility impacts real estate investment trusts.