In brief
Australia’s annual inflation climbed to 4.3 % in September, the highest level since March, driven by jumps in housing and transport costs. The Reserve Bank of Australia sees this as a sign the cash rate may need to be raised again, after already lifting it to 4.6 % in September.
On Oct. 28, the Australian Bureau of Statistics released data showing the consumer price index had risen to a six‑month high of 4.3 percent in September, up from 4.0 percent in August.
Housing costs were the biggest driver, with prices increasing 5.2 percent year‑on‑year, while transport costs jumped 8.7 percent, a swing largely attributed to higher fuel prices.
Rachael McCririck, head of prices statistics at the ABS, explained the data:
‘On a monthly basis, automotive fuel prices rose 9.4 percent in September, compared to a rise of 14.8 percent in August. This was driven by higher world oil prices.’
The Reserve Bank of Australia’s preferred measure of underlying inflation, the trimmed mean, edged up from 3.5 percent in August to 3.6 percent in September.
In late September, the RBA’s Monetary Policy Board increased the cash rate target by 0.25 percentage points to a 15‑year high of 4.6 percent, citing the inflationary impact of the Middle East conflict. The Australian Broadcasting Corporation reported that the likelihood of another rate hike at the November meeting rose from 60 percent to 79 percent following the latest data.
With the inflation data released ahead of the November policy meeting, economists and consumers alike are watching closely to see whether the bank will raise rates again in an effort to bring prices back down.
