Economy News

Australia's inflation jumps to 4.3%: is a fifth rate rise this year now certain?

Australia's annual inflation rate rose to 4.3% in September, according to the Australian Bureau of Statistics. The Guardian reports that the Reserve Bank of Australia's preferred gauge, underlying inflation, came in at 3.6% a year to September, sharpening expectations of a fifth interest rate rise this year at the RBA's meeting next week.

The Star in Malaysia, carrying Reuters, adds the quarterly detail: headline prices rose 1.3% in the third quarter after 0.6% in the second, and the trimmed mean rose 1.0%, in line with forecasts. Goods inflation reached 4.6% and services 4.1%. Fuel costs rose again, with Brent crude above $110 a barrel.

Markets moved fast. Traders priced an 85% chance of a quarter-point hike from the current 4.6% cash rate, up from 69%, and the Australian dollar rose 0.3% to $0.7043. Three-year bond futures fell 7 ticks to 95.08, and new dwelling prices were flat in September as builders offered more discounts.

How each outlet framed it

• The Guardian — a household story: the Middle East conflict is intensifying Australia's cost-of-living crisis ahead of the RBA decision.
• The Star — a markets story: the hike odds, bond futures and the currency, with core inflation well above the RBA's 2–3% target.

Where the numbers differ: both are right but measure different things. 4.3% is the annual rate for September alone; the quarterly series shows annual inflation of 3.9%; and 3.6% is the RBA's underlying measure.