Australian consumer prices rose at their fastest annual pace in a year, according to data released Wednesday by the Australian Bureau of Statistics. The Consumer Price Index (CPI) increased 3.0% year-on-year in August, up from July’s 2.8% and slightly above median forecasts of 2.9%.
Monthly inflation was flat, however, as declines in electricity prices—down 6.3% due to new government rebates—and a 3.5% drop in holiday travel and accommodation costs offset other increases.
A key measure of core inflation—the trimmed mean—eased to 2.6% in August from 2.7% in the previous month. Another measure that excludes volatile items and holiday travel rose to 3.4% from 3.2%. Analysts noted that the monthly data tend to be volatile and do not cover the full basket of goods and services.
As a result, economists including Paul Bloxham of HSBC expect the Reserve Bank of Australia (RBA) to keep rates on hold at its meeting next week, with markets dialing back expectations for a hike in November to 60% from nearly 70% ahead of the release.
Meanwhile, Governor Michele Bullock on Monday noted that the Australian economy remains in a solid position, with inflation forecast to return to the central bank’s 2%-3% target and the job market maintaining its resilience amid a 4.2% unemployment rate.
