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Chance of Rate Cut This Year All but Vanishes After Inflation Surges
Inflation rose 3.2% annually due to higher electricity, rents, and services costs, making a November rate cut unlikely, with tightening more probable, Reserve Bank of Australia said.
- Next week, Reserve Bank of Australia governor Michele Bullock warned on Monday night that rates cannot be cut next Tuesday after inflation reached 3.2 per cent, breaching the target band, and a 0.9 per cent quarterly core inflation would be a `material miss`.
- The end of electricity rebates was the biggest inflation driver, with electricity prices rising 23.5% and power costs up 5.9% over the past year alongside rents and medical services.
- Markets reacted, with the Australian dollar climbing almost half a cent to US20 and the ASX200 falling after Wednesday's data release.
- Traders pushed back expectations, with market pricing cut the odds of a November rate cut from about 20 to less than 10 percent, and December odds to about 20.
- Economists say rate cuts are unlikely until next year, with LoadingEY chief economist Cherelle Murphy noting trimmed mean inflation is moving away from the midpoint; the RBA will update its forecasts next week, expecting inflation to rise around 0.6 per cent.
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Inflation Jumps to 3.2 Percent in September
In a major setback for those expecting a rate cut, Australia’s annual inflation rate climbed to 3.2 percent in September, up from 2.1 percent in June, according to the latest data from the Australian Bureau of Statistics (ABS). The Consumer Price Index rose 1.3 percent over the quarter, while underlying inflation lifted to 3 percent from 2.7 percent. Data comes ahead of the Reserve Bank of Australia’s (RBA) next monetary policy meeting, where th…
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Coverage Details
Total News Sources14
Leaning Left3Leaning Right1Center1Last UpdatedBias Distribution60% Left
Bias Distribution
- 60% of the sources lean Left
60% Left
L 60%
C 20%
R 20%
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