Rising Consumer Prices Spur Inflation Jump in September
Seasonal spikes in three major consumer goods led to an inflation surge of more than 2 percent over the past three quarters, the TD Securities-Melbourne Institute reported Monday.
For September, TD Securities said inflation jumped by 0.1 percent, coming from an improvement of 0.1 percent in the previous month and resulting into an inflation level of 2.8 percent from the past nine months.
The September data, the survey said, actually represents a slight push as August saw inflation at 2.9 percent though the past two-month figures breached the upper target set earlier by the Reserve Bank of Australia.
The RBA set the band between 2 to 3 percent in September, by which time prices of alcoholic drinks and tobacco, automotive fuel and household service soared. This, according to TD Securities, effectively nixes the price retreats seen in fruit and vegetable prices, motor vehicles, and dairy products.
Annette Beacher, head researcher for TD Securities Asia-Pacific, took the September inflation gauge as signifying that "the acceleration in prices evident in the first half of this year may have taken a breather."
"However, the spike in the annual rate of our trimmed measure to 2.8 per cent is a trend worth watching closely for signs of year-end inflation re-acceleration," Beacher cautioned.
Last month's gauge of 0.1 percent brings in an inflation trend of 2.8 percent so far in the past nine months, which Beacher said could convince the RBA board to hold back any plans of moving up the cash rates on its scheduled meet on Tuesday.
"For the RBA board meeting tomorrow, a pause in inflation pressure and ongoing ructions in financial markets provides ample ammunition to sit tight," Beacher told the Australian Associated Press.
Yet she quickly added that economists' forecast of a rate cut back by December or January was also quite remote, reiterating that the "RBA board communiqué has been balanced with a neutral bias throughout, and recent senior RBA staff speeches continue to voice outright optimism."
"This ongoing brave public face ... despite wild swings in global financial markets in recent months ... supports our current view of the RBA remaining on hold at 4.75 per cent for quite some time," Beacher said.