Declining Goods Prices Offset by Rising Service Costs
Australia’s annual inflation rate fell to 2.8% in the September quarter the lowest in 3.5 years although underlying inflation remains above the Reserve Bank’s target. The drop was largely due to lower petrol and power prices, helped by easing global oil prices and state-driven power rebates.
Goods inflation saw a notable decrease, falling from 3.2% to 1.4% annually. However, service costs continued to climb, reaching 4.6%, with rent, insurance, and child care as key contributors.
Despite this overall decrease, economists do not anticipate an interest rate cut by the Reserve Bank at the upcoming Melbourne Cup Day meeting. A more likely move by the bank is expected in February or April next year, as underlying costs continue to weigh on the economy