More interest-rate increases in SA cannot be avoided as inflation expectations remain high‚ the Reserve Bank suggested in its annual report on Friday. "As most measures of underlying inflation and inflation expectations are already close to the top end of the inflation target range‚ there is little space to defer a policy response‚" the Bank’s management said in the report.Average inflation expectations of analysts‚ business people and trade unions for 2016 and 2017 as measured by the Bureau for Economic Research were at 6.2% in the first quarter. This is outside the 3% to 6% band within which inflation is targeted in SA. The inflation outlook is made worse by a weak rand‚ which weakened sharply to R15.67/$ in line with other emerging-market currencies after a UK referendum voted to leave the European Union. It has since recovered a slightly to R15.01 by midday on Friday."Both interest rate increases and the Bank’s broader communication strategy are aimed at persuading price and wage setters‚ as well as other participants in the economy‚ that inflation will remain within the target over the medium term‚" the Bank said.Listen: Pravin Gordhan responds to Britain's EU exitIn light of Britain's exit from the European Union, ongoing efforts by South Africa to reignite growth have become that much more urgent and critical, Finance Minister Pravin Gordhan said on Friday. The Bank has raised the repo rate 200 basis points since January 2014 to curb inflation‚ which remains outside the target mainly on drought-induced high food prices and a weak rand.Policy makers were "cognisant" that economic growth was very subdued‚ the Bank said in the report. The current rate-hiking cycle had been slower than any in recent history mainly due to low growth‚ it said.The Bank remained profitable during the financial year ended March 2016‚ recording an after-tax profit of R1.6bn compared with R630m in the previous financial year.TMG Digital/BDlive..