Australia's inflation unexpectedly rises to 4.3% – rate hike looks more likely
Consumer prices rose 0.8% in September alone. The central bank decides next week, and markets are betting on an increase.
Symbolic image · Photo: Danausi / Wikimedia Commons, Public domain (cropped and resized)
Inflation in Australia has unexpectedly accelerated. Consumer prices rose 0.8% in September from the previous month, according to data released on Wednesday, lifting the annual rate to 4.3% from 4.0% in August, public broadcaster ABC reported. On a seasonally adjusted basis the monthly rise was 0.6%. The trimmed mean measure, which the Reserve Bank of Australia (RBA) regards as the key gauge, rose 3.6% year on year – in line with expectations but above the central bank's earlier forecasts.
Even before the data, markets put the probability of a rate hike in November at more than 60%. RBA Deputy Governor Andrew Hauser had said the inflation outlook looked "materially worse" than forecast. UBS expects a 25-basis-point increase to 4.85%, while the Commonwealth Bank's baseline is a hold, though it says a hike is possible.
The RBA board meets on Monday and will announce its decision on Tuesday afternoon together with updated forecasts. The Australian dollar rose to 70.42 U.S. cents after the data.