Finance Finance News Consumer price index shows inflation at 2.2 per cent for the year, 1.2 per cent for the quarter

Consumer price index shows inflation at 2.2 per cent for the year, 1.2 per cent for the quarter

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Official figures show consumer prices increased more rapidly than expected in the three months to the end of September, keeping inflation within the Reserve Bank’s target range.

The result has provoked economists to forecast the RBA will keep the official interest rate on hold for the next few months.

The Consumer Price Index increased by 1.2 per cent in the quarter, taking the annual inflation rate to 2.2 per cent.

Economists had expected prices to increase by 0.8 per cent for the quarter, and 1.2 per cent for the year.

UBS senior economist George Tharenou expects the result to further encourage the RBA board to keep the cash rate on hold at 2.5 per cent at its November meeting.

“Given that the outlook for the economy is still relatively moderate and recently you’ve seen quite a sharp rebound in the Australian dollar I think the inflation outlook is still contained and is consistent with the RBA keeping rates on hold for a prolonged period,” he said.

Water and fuel lead price rises

The biggest increase was seen in in water and sewerage costs, which increased by 9.9 per cent during the quarter.

Fuel prices increased by 7.6 per cent, council rates and charged rose by 7.9 per cent, and the cost of international holidays climbed by 6.1 per cent.

Electricity prices increased by 4.4 per cent, and gas rose by 4.8 per cent.

The Treasurer Joe Hockey says power costs will come down if the Coalition’s legislation to repeal the carbon price is successful.

“Abolishing the carbon tax will save households, on average, $550 a year next year,” he said.

“So I implore the Labor Party to allow the carbon tax repeal legislation to pass through the Parliament so that Australians can have some relief on every day cost of 

living challenges.”

Vegetable prices fall, Melbourne and Adelaide record highest inflation rates

Vegetable prices fell by 4.5 per cent, but this was balanced by a 3.2 per cent rise in the cost of fruit.

Vegetables are now 10.7 per cent cheaper than a year ago.

The cost of childcare is now 8.8 per cent higher than a year ago, after rising by 3.4 per cent in the quarter.

Adelaide and Melbourne recorded the highest rates of inflation for the month, with prices rising by 1.4 per cent for the quarter in both cities.

In Brisbane inflation was at 1.3 per cent, while in Sydney and Perth it was at 1.2 per cent.

Prices increased by 0.6 per cent in Hobart in Darwin, and by 0.6 per cent in Canberra.