The Australian Bureau of Statistics (ABS) today released the September quarter Consumer Price Index data. These statistics attempt to measure the inflation in prices in the economy. The results show that the cost of the basket of goods used to measure price levels in the Australian economy has risen by 0.7% for the quarter and 1.9% for the year. These are known as the Headline figures.
Breaking down this data, the ABS recorded the following significant movements in prices for the quarter.
- fruit (+9.6%),
- vegetables (+7.9%),
- deposit and loan facilities (+2.2%),
- rents (+1.6%),
- other financial services (+2.3%),
- house purchase (+1.0%),
- electricity (+4.3%),
- overseas holiday travel and accommodation (+4.2%),
- property rates and charges (+4.5%),
- water and sewerage (+5.5%),
- domestic holiday travel and accommodation (+1.8%) and
- other motoring charges (+2.6%)
- child care (-33.4%), - as a result of the change in eligibility criteria for Child Care Tax Rebates
- automotive fuel (-3.7%),
- pharmaceuticals (-4.5%),
- audio, visual and computing equipment (-2.5%) and
- furniture (-1.5%)
However, the Reserve Bank of Australia's separate Consumer Price Measure, referred to as the core figures, showed inflation for the quarter at 0.9% and 2.9% for the year. The Reserve Bank will look carefully at this data in deciding whether to raise, or lower, interest rates at the next board meeting on Melbourne Cup day - Tuesday 6th November. With inflation at the higher end of the 2 to 3% rate targeted by the Reserve Bank many forecasters are predicting a lifting of the official interest rate. This is clearly shown by the futures market who have priced in a 75% chance of a 0.25% increase to 6.75%.
There is bound to be a deal of nervousness when the decision is announced at 9.30am on Wednesday 7th.
(To be taken to the Australian Bureau of Statistics data click here)