Australia inflation data expected to exceed RBA forecasts

Australia’s third-quarter Consumer Price Index (CPI) data, due Wednesday, is expected to show underlying price pressures exceeding the Reserve Bank of Australia’s (RBA) own forecasts. Major banks anticipate quarterly trimmed mean inflation between 0.9% and 1.0%, surpassing the RBA’s 0.8% projection.

Market analysts suggest the upcoming data could determine whether the RBA implements a cash rate hike during its November 3 meeting. While ANZ and Westpac anticipate a rate increase, CBA and NAB expect the board to hold the current rate at 4.6%.

Global energy volatility remains a significant factor, as rising oil prices linked to conflicts in the Middle East continue to impact supply chains and headline inflation. RBA Assistant Governor Sarah Hunter noted that the central bank has “not quite yet” done enough to bring inflation under control, while Deputy Governor Andrew Hauser previously indicated that the inflation outlook is materially worse than assessed in August.