Annual inflation holds at 2.5%, which may prompt interest rate reduction

By Reuters 14 November 2025, 2:17 pm

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Israel’s annual inflation rate held steady in October at 2.5 percent, according to data from the Central Bureau of Statistics, a level that could prompt policymakers to reduce interest rates as early as later this month.

The October rate was in line with expectations of 2.5% in a Reuters poll and is within the government’s 1%-3% annual target range.

The Consumer Price Index rose 0.5% in October from September.

The Bank of Israel will decide on interest rates on November 24. It has stayed on hold for nearly two years, taking a cautious approach on rates, arguing the two-year Gaza war helped to underpin inflation due to supply constraints, along with an expansionary budget to help fund the conflict.