Australia’s CPI rose to 5.2% in August as attempts to tame inflation falter
- 7 months ago
#Australia #CPIrose #52
Australia's inflation gauge accelerated last month, led by fuel prices and rising rents, making clear the fight against household prices is far from over. According to Bureau of Statistics, consumer price index for August stood at 5.2% annually, compared to 4.9% previous month; This represents first jump in four months and undoes recent progress reducing inflation. The rise in inflation will fuel the debate over whether another cash rate hike is needed to cool inflation; But monthly numbers are volatile and monetary policymakers may ignore a rise in oil prices if it turns out to be temporary. The Central Bank expects the 2-3% target inflation range to be reached in late 2025, three years after reaching a peak of 8.4%. The RBA board will meet next week to make its first interest rate decision, chaired by new governor Michele Bullock. The board has previously stated that the official cash rate of 4.1% may need to increase further if inflation is more persistent than expected. Global stock markets have been on edge recently due concerns that borrowing rates may need to remain high for extended periods of time combat persistent inflation. According to economists and analysts, the CPI increase does not represent an automatic trigger for the Central Bank to raise interest rates again. Stripping out some of more volatile CPI components such as fuel, holiday travel and fruit and vegetables, the index fell to 5.5% annually in August from 5.8% in previous month. IG Australia market analyst Tony Sycamore said the result was in line with expectations. "Today's inflation data will not move dial ahead of the October RBA meeting, where RBA is widely expected to remain on hold," Sycamore said. AMP deputy chief economist Diana Mousina said there was a risk of another rate hike before the end of the year. "But for now, we expect the RBA to leave the cash rate unchanged at its board meeting next week," he said. Most economists think the RBA will wait for quarterly inflation data and employment figures before making a definitive decision, pushing a potential rate hike to at least November. Markets are strongly pricing in the possibility of a final increase in the middle of next year. The consumer index shows how difficult rising housing costs are for tenants, with rents rising by 7.8% last year. This represents an increase in costs compared to previous months and indicates that the rent shortage is getting worse. Electricity and other energy bills also continue to increase at double-digit rates on an annual basis. The ABS said the most significant price increases were in transport , housing , food and insurance and financial services . The steep 13.9% increase fuel prices in 12 months until August formed the basis for increase transportation costs. Global oil prices are rising due to growing concerns about the supply gap following production cuts by Saudi Arabia and Russia. This situation was also reflected in pump; According to the Austral
Australia's inflation gauge accelerated last month, led by fuel prices and rising rents, making clear the fight against household prices is far from over. According to Bureau of Statistics, consumer price index for August stood at 5.2% annually, compared to 4.9% previous month; This represents first jump in four months and undoes recent progress reducing inflation. The rise in inflation will fuel the debate over whether another cash rate hike is needed to cool inflation; But monthly numbers are volatile and monetary policymakers may ignore a rise in oil prices if it turns out to be temporary. The Central Bank expects the 2-3% target inflation range to be reached in late 2025, three years after reaching a peak of 8.4%. The RBA board will meet next week to make its first interest rate decision, chaired by new governor Michele Bullock. The board has previously stated that the official cash rate of 4.1% may need to increase further if inflation is more persistent than expected. Global stock markets have been on edge recently due concerns that borrowing rates may need to remain high for extended periods of time combat persistent inflation. According to economists and analysts, the CPI increase does not represent an automatic trigger for the Central Bank to raise interest rates again. Stripping out some of more volatile CPI components such as fuel, holiday travel and fruit and vegetables, the index fell to 5.5% annually in August from 5.8% in previous month. IG Australia market analyst Tony Sycamore said the result was in line with expectations. "Today's inflation data will not move dial ahead of the October RBA meeting, where RBA is widely expected to remain on hold," Sycamore said. AMP deputy chief economist Diana Mousina said there was a risk of another rate hike before the end of the year. "But for now, we expect the RBA to leave the cash rate unchanged at its board meeting next week," he said. Most economists think the RBA will wait for quarterly inflation data and employment figures before making a definitive decision, pushing a potential rate hike to at least November. Markets are strongly pricing in the possibility of a final increase in the middle of next year. The consumer index shows how difficult rising housing costs are for tenants, with rents rising by 7.8% last year. This represents an increase in costs compared to previous months and indicates that the rent shortage is getting worse. Electricity and other energy bills also continue to increase at double-digit rates on an annual basis. The ABS said the most significant price increases were in transport , housing , food and insurance and financial services . The steep 13.9% increase fuel prices in 12 months until August formed the basis for increase transportation costs. Global oil prices are rising due to growing concerns about the supply gap following production cuts by Saudi Arabia and Russia. This situation was also reflected in pump; According to the Austral