Australia’s headline inflation rate has accelerated to ۴.۳%, with a key gauge that strips out volatile prices also elevated, sharpening expectations of another interest rate rise next week.
The Reserve Bank of Australia’s preferred measure of consumer prices, called underlying inflation, came in at an annual ۳.۶% to September.
RBA officials have strongly indicated the board may need to lift borrowing costs further to drag price growth back toward its ۲.۵% target, citing concerns of a “materially worse” inflation outlook.
The CPI release comes shortly ahead of the central bank’s next monetary policy decision on ۳ November, when most economists are tipping another cash rate increase.
The RBA’s deputy governor, Andrew Hauser, described the inflation numbers as “too high” at senate estimates on Wednesday, shortly after the data was released.
He said there was a “nightmare” risk that longer-term inflation expectations would pick up, making it harder to get inflation out of the system.
“We don’t think it is necessarily crystallising yet, but it is a particular risk,” Hauser said.
The cash rate, which informs lending rates including mortgages, already stands at ۴.۶%, its highest level in ۱۵ years.
CPI figures released by the Australian Bureau of Statistics on Wednesday show that costs for everyday goods and services are rising at the same time as unemployment lifts, making life uncomfortable for households.
Transport costs have risen ۸.۷% over the past ۱۲ months, due in large part to escalating fuel prices stemming from the US and Israel conflict with Iran.
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Food prices have also jumped another ۳.۲% in a year, and housing costs were up ۵.۲%.
The escalating expenses have fed into the growing political unease in Australia and elsewhere, as voters express their discontent with cost of living pressures.
Housing, which is the single biggest category in the CPI, was the largest contributor to annual inflation, according to the ABS, followed by transport costs.
Builders have been passing on higher costs for materials and labour for new dwellings, while electricity prices are also elevated.
