The Reserve Bank might be forced to continue its punishing round of interest rate hikes, with concerning new data revealing inflation remains stubbornly high.
Annual headline inflation fell to 5.4 per cent in September, from 6 per cent in June, data released by the Australian Bureau of Statistics on Wednesday showed, but price pressures across the economy remained acute.
The data was stronger than economists’ expectations of a 5.3 per cent increase and suggests that it will be difficult for inflation to hit the RBA’s current forecasts for December quarter of 4.1 per cent.
The fresh figures are likely to be concerning news for freshly minted RBA governor Michele Bullock as evidence that inflation remains stubbornly persistent, and further monetary tightening may be required to return price growth to the central bank’s 2 to 3 per cent target band.
The RBA’s preferred measure of underlying price pressures, trimmed mean inflation, slowed to 5.2 per cent from 5.9 per cent in June, which was a little higher than expected.
The RBA board will meet on Melbourne Cup Day on November 7 to determine if the cash rate should be raised from its current level of 4.1 per cent.
More to come.
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