Australia’s annual inflation rate rose to 4.3% in September, according to new data from the Australian Bureau of Statistics (ABS).
That is up from the 4% inflation rate recorded in August, and is the second month in a row where it has increased.
The news comes ahead of the Reserve Bank of Australia (RBA)’s next meeting, where the board will decide whether or not to increase the cash rate in order to combat high inflation.
Inflation
Inflation measures the change in the prices of goods and services over time.
The most common measure of inflation is the Consumer Price Index (CPI), which tracks the rate of price changes and is typically expressed as an annual rate.
This is often called ‘headline inflation’.
Why the increase?
The main drivers of inflation were transport and housing.
The cost of transport rose by 8.7% in the year to September, which the ABS said was mostly due to the 23.6% yearly increase in the price of automotive fuel.
Your contribution ensures The Daily Aus can continue doing the work you love.
I want to give $10 monthly to help TDA keep doing the news.
Your details:
Housing cost changes were due to the increased prices of new properties (via higher labour and material expenses), electricity costs, and rental prices.
Trimmed mean
The quarterly ‘trimmed mean’ is a measure of inflation that ignores the most extreme price movements (e.g. a sudden increase in the price of petrol).
The RBA prefers this measure as it ignores any short-term noise.
The trimmed mean was 3.7% in the 12 months to the September quarter, higher than the June quarter.
RBA
The news comes a week before the RBA will decide whether to raise the cash rate.
The cash rate is the interest rate that banks charge each other for short-term loans, and is the tool used by the RBA to get inflation under control.
The RBA increases the cash rate if inflation is too high and decreases the cash rate if inflation is too low, aiming for an inflation rate between 2 and 3%.
