CANBERRA — Australia’s annual inflation rate rose to 4.3 percent in September from 4.0 percent in August, driven by a jump in fuel prices, sharply raising expectations of an interest rate increase next week.
The Australian Bureau of Statistics said a 9.4 percent rise in fuel costs in September was largely responsible. Petrol and diesel prices were on average 24 percent higher than a year earlier. Underlying inflation for the September quarter was 3.7 percent, above the Reserve Bank’s August forecast of 3.5 percent.
Markets now put the chance of a rate hike at the Reserve Bank’s meeting on Tuesday at 87 percent. A 25-basis-point increase would take the cash rate to 4.85 percent, its highest since 2008, ABC News reported.
Treasurer Jim Chalmers said the figures were “too high” but rejected opposition claims that government spending was the main driver, citing the Middle East war and a surge in private investment in data centers. “For every five dollars of demand in our economy, four dollars [are] private and one dollar is public,” he said.
Chalmers also played down the chances of further fuel tax discounts, citing budget pressures.
Sources: ABC News (Australia), The Guardian
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