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Inflation in Australia:- In the September quarter, Australia’s CPI inflation rose 1.8%. Annual inflation jumped from 6.1% to 7.3%, the highest since 1990. During the past year, food costs have increased by 9.0%.
Inflation in Australia Rises To 7.3%, The Highest Level In 32 years
Inflation in Australia surged last quarter to its highest level in 32 years as house construction costs and gas prices spiked, fueling calls for the central bank to raise rates aggressively. On Wednesday, the Australian Bureau of Statistics (ABS) reported that the consumer price index (CPI) increased 1.8% in the September quarter, above market expectations.
A jump in the annual rate from 6.1% to 7.3% was the largest since 1990 and nearly three times the wage growth rate. This increase puts the annual rate at 6.1%, above expectations of 5.6%, according to the trimmed mean, widely used to gauge core inflation.
According to the Reserve Bank of Australia (RBA), core inflation peaked at 6.0% in the December quarter, with headline inflation peaking at 7.75%. This is the highest level in over two weeks for the Australian dollar, rising 0.3% to $0.6412.
In Q4, consumer prices are expected to rise more quickly than expected, which is consistent with Capital Economics’ prediction that the Reserve Bank will increase interest rates more aggressively than people anticipate.
A staggering 250 basis points have been added to rates since May, and the RBA had planned to proceed at a slower pace to gauge how the sharp tightening was affecting consumer spending.
Food prices are already rising at a 9.0% annual rate, with a 3.2% increase in the third quarter alone, according to Wednesday’s CPI data.
Rates are now expected to rise a half-point in December and peak around 4.20% in July, according to futures, although on November 1 they are expected to rise a quarter-point to 2.85%.
On November 2, the Federal Reserve is likely to follow the Bank of Canada and the European Central Bank in raising interest rates by 75 basis points.
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