Consumer price index rises by half a percentage point in September quarter

Retail prices rose less than predicted over the past few months, the Bureau of Statistics says, suggesting the sluggish economy is keeping a lid on inflation.

The bureau said the consumer price index (CPI) increased by 0.5 per cent over the September quarter and 1.5 per cent over the year.

Economists surveyed by Bloomberg had predicted a rise of 0.7 per cent for the quarter and 1.7 per cent over the year to September.

Of the CPI measures watched by the Reserve Bank, the trimmed mean rose by 0.3 per cent over the quarter and 2.1 per cent over the year, and the weighted median increased by 0.3 per cent over the quarter and 2.2 per cent over the year.

The annual rises were within the Reserve Bank’s target range of 2 to 3 per cent and could put pressure on the central bank to cut official rates when it meets on Melbourne Cup day next week.

Prices rose 0.7 per cent in the June quarter and 1.5 per cent over the year to June.

The most significant price rises were for international holidays and accommodation, which rose by 4.6 per cent from June to September.

Fruit prices increased just over 8 per cent and property rates and charges went up 4.6 per cent.

Vegetable prices fell nearly 6 per cent and petrol dropped 1.7 per cent because of weaker global oil prices.

Prices rose the most in Brisbane and the least in Canberra.

The Australian dollar plunged more than half a US cent on speculation of a possible official rate cut to a low of 71.20 US cents, the lowest in three weeks.

It is now trading at around 71.33 US cents.

Source: ABC News