Inflation Increases 0.2 Percent

The latest data showed that inflation for the month of September has risen 0.2 percent. This means that the Reserve Bank of Australia can cut interest rates again.

According to TD Securities-Melbourne Institute Monthly Inflation Gauge, inflation rose 0.6 percent in August. From the year to September, inflation rose about 2.4 percent.

Price increase in travel, fuel, fruits and vegetables were the main contributor to September’s inflation hike. These, however, were offset by a decline in rentals, footwear, computing equipment, among others.

Underlying inflation, however, stayed flat last month. It has an annual increase of 2.4 percent, which the RBA says is within the target range.

According to Annette Beacher, headline inflation may increase by about 0.8 percent. This is 1.4 percent higher than last’s year number. Beacher is Asia-Pacific Research TD Securities head.

Beacher also added that underlying inflation may rise 0.5 percent for the quarter. This would mean the annual rate would increase from 2.0 to 2.1 percent.

The TD Securities head, however, is quick to clarify that that carbon tax doesn’t have much impact on prices. She added that she does not expect the Reserve Bank to impose a cut on the cash rate.