Quarterly CPI was higher than economists’ expectations and will increase speculation that the Reserve Bank may again raise interest rates
Australia’s inflation rate quickened in the September quarter, boosted by higher petrol prices, adding to pressure on the Reserve Bank to hike interest rates again.
The headline consumer price index rose 1.2% in July-September, up from 0.8% in the June quarter, the Australian Bureau of Statistics reported on Wednesday. Economists had expected the quarterly rate to come in 1.1%. At an annual rate, headline CPI was 5.4% compared with 6.0% in the June quarter. Economists had predicted the annual rate to come in at 5.3%, extending the decrease from a peak in the December quarter of 7.8%.
The RBA has left its key interest unchanged at 4.1% for the past four months. Ahead of today’s inflation numbers, markets were pricing in about a one-in-three chance that the central bank would like the cash rate to 4.35% at the 7 November meeting.that “the Bboard will not hesitate to raise the cash rate further if there is a material upward revision to the outlook for inflation”.
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