Australia’s Q3 CPI has come in at 1.2%, up 2.2% year-on-year.
The figure beat market expectations of 0.8% this quarter and 1.8% year-on-year by a significant margin. CPI grew 0.4% in Q2 and 2.4% in the 12 months to 30 June.
The largest quarterly price gains were posted by the housing (2.0%) and transport (2.4%) sectors, in line with analyst expectations.
A low AUD contributed to significant quarterly increases in petrol prices (7.6%), international travel and accommodation prices (6.1%), and domestic travel and accommodation prices (3.5%).
Electricity, property rates and charges, water and sewerage also grew significantly, at 4.4%, 7.9% and 9.9% respectively, while vegetable prices fell 4.5%.
UBS economists Scott Haslem and George Tharenou, whose expectations were slightly above the market average (0.9% q/q, 1.9% y/y), expected housing costs to rise on rate, rent and construction gains and transport prices to rise on fuel costs, services and fares.
Westpac’s Q3 CPI outlook was similar (1.0% q/q, 2.0% y/y), with senior economist Justin Smirk noting that the year-on-year fall from Q2’s 2.4% reflected a ‘dropping out’ of the residual impact of the carbon tax’s introduction.
HSBC expected Q3 CPI to come in slightly under market expectations (1.7% y/y) – low enough for the RBA to cut rates further although chief economist Paul Bloxham and economist Adam Richardson said “it will be reluctant to do so, as rates are already low and gaining traction”.
The ABS has published the CPI data here.
Business Insider Emails & Alerts
Site highlights each day to your inbox.