Australian Inflation Races To 32-Year High

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Economy news
26.10.2022
Australian Inflation Races To 32-Year High
Inflation in Australia soared to a 32-year high in the last quarter as the cost of living continued to climb. Prices for gas and construction items skyrocketed, surprising analysts and renewing calls for a return to more aggressive rate hikes by the country’s central bank.
Data released this week showed the consumer price index leapt 1.8% in the September quarter, beating market expectations of 1.6%. Annualized inflation raced to 7.3% from 6.1% last year, the highest surge since 1990 and almost three times the pace of wage growth.
All this is bad news for the Reserve Bank of Australia (RBA), which had expressed hope that inflation would settle at around 6% in the December quarter. It is doubly inconvenient for the RBA since it surprised many this month by downgrading to a 25-basis point rate hike, following four moves of 50 basis points.
What does this mean for me? 
Analysts warn that both core and headline inflation are certain to rise even further this quarter, based on current trends. Investors now feel the central bank will have to reconsider its cautious rate-hiking stance, if not at its policy meeting next week, then in December.
The RBA is under pressure to follow the lead of contemporary developed nations. The European Central Bank and the Bank of Canada are both expected to hike rates by 75 basis points this week, while the US Federal Reserve expects to go the same way at its meeting on November 2.

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