Australian inflation runs hot in Q3, cements case for imminent rate rise
Stubborn inflation has forced the RBA to lift interest rates four times this year to a 15-year high
In the third quarter, Australia's inflation rose, indicating that stubborn price pressures will likely lead to a fifth interest rate hike in the near future. Higher fuel costs contributed to the increase in inflation, which now stands at a 15-year high. The Australian Bureau of Statistics reported that the consumer price index (CPI) increased by 1.3% in the third quarter, with the core inflation measure rising by 1% and the annual pace reaching 3.7%, surpassing the RBA's target range of 2-3%.
Market expectations have risen, with an 88% probability that the Reserve Bank of Australia (RBA) will raise the cash rate by 0.25% to 4.9% on November 3, up from the previous 69% probability. RBA deputy governor Andrew Hauser warned that inflation could become embedded in expectations after more than five years of being above target.
The increase in oil prices, which has risen by 10% this quarter, is also causing concerns among policymakers.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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