Inflation in Australia has eased in October but is still up 4.9 percent year-on-year ahead of a cash rate decision next week.
Alcohol and tobacco inflation rose to 6.6 percent year on year, up from 5.8 percent in the previous month. Housing inflation eased slightly to 6.1 percent, down from 7.2 percent in the 12 months up to September.
In the housing category, rent prices have risen 6.6 percent in a year, while electricity prices have surged 10.1 percent in a year.
Food and non-alcoholic beverages inflation jumped 5.3 percent in the 12 months up to October, up from 4.7 percent in the 12 months up to September.
Fuel prices leapt 8.6 percent in the 12 months to October, an improvement on the 19.7 percent in the year up to September.
RBA To Meet on Interest RatesThe Reserve Bank of Australia (RBA) lifted the official cash interest rate by 25 basis points on Nov. 7, to 4.35 percent.
ANZ senior economist Catherine Birch predicted the central bank would keep interest rates on hold at its next meeting.
The board is due to meet at 2:30 p.m. on Dec. 5 for a monetary policy decision, the final meeting this year.
Ms. Birch said the weaker-than-forecast inflation result reflected unexpected or higher-than-expected falls in a number of categories rather than a broad slowdown during the month.
“There were noteworthy falls in holiday prices, rent and furnishings, household equipment, and services,' Ms. Birch said.
“As such, trimmed mean inflation only edged down to 5.3 percent year-on-year from 5.4 percent year-on-year in September. Although there was a sharper slowdown in inflation ex-volatile items and holiday travel to 5.1 percent year-on-year.
“Importantly the October monthly CPI indicator does not accurately reflect domestically driven and services inflation, which RBA governor Michele Bullock, said in a recent speech are driving inflation.”
Tobacco Prices SurgeTobacco prices soared 10.4 percent in the 12 months to October, up from 7.5 percent in the year up to September.
“In monthly terms, prices for tobacco rose 3.4 percent in October 2023, following a rise of 4.8 percent in September,” the ABS said.
New Zealand Keeps Rates on HoldMeanwhile, across the ditch, the Reserve Bank of New Zealand agreed to keep the official cash interest rate on hold at 5.5 percent at a meeting on Nov. 29.
The committee aims to return consumer price inflation to a target range of 1 to 3 percent and ensure as many people as possible are employed.