There has been a big jump in the TD Securities – Melbourne Institute Monthly Inflation Guage for December, with a print of 0.7%.
That’s the type of number you’d expect on the quarterly CPI, due out late this week, not a monthly rise in prices.
The December increase has driven the yearly measure to a rise of 2.7%. That is still inside the RBA’s 2-3% range, but closer to the top of the band.
Primary drivers of the increase in prices according to TD were rises in Fuel, as well as Fruit and vegetables which rose 5% and 5.8% respectively. Tobacco was also higher.
Head of Asia-Pacific research at TD securities Annette Beacher said:
“The message from this strong report needs to be treated with a little caution, as December is a seasonally strong month for our Gauge, while the tobacco price increase rests squarely with the previous government’s staggered excise tax increase.”
The official measure of inflation for the 4th quarter of 2013 will be released by the Australian Bureau of Statistics at 11.30 am on Wednesday. Beacher and the market are expecting a rise of just 0.5%.
Today’s number suggests there might be a topside surprise.