Inflation figures released yesterday claim that inflation rose by 3.8% in the 12 months to October, "surging" well outside the Reserve Bank's target inflation range of 2%-3%.
The TD Securities - Melbourne Institute Monthly Inflation Gauge rose by 0.3% in October, following a 0.1% rise in September and a 0.2% rise in August. The trimmed mean of the inflation gauge rose by 3.1% over the 12 month period, according the TD Securities.
TD Securities senior strategist Annette Beacher said in a statement to media that inflationary pressures remained contained into the third quarter of this year, but the pickup in price pressure in October indicates inflation in the September quarter could be a cyclical low point.
“The RBA is clearly poised to lift the cash rate from the currently neutral stance of 4.5%, with recent speeches and the October RBA Board meeting minutes suggesting another upward adjustment in the coming months," Beacher said.
However, she tipped a rate hold for today, following CPI inflation figures released last week that put inflation at just 2.8%, pleasantly surprising economists by falling well within the RBA target range.
"As the benign September quarter inflation report failed to provide a smoking gun, we expect the RBA Board to sit tight at 4.5%," Beacher said.
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