Inflation remains subdued:
The TD Securities – Melbourne Institute Monthly Inflation Gauge increased by 0.2 per cent in September, following an increase of 0.6 per cent in August and a rise 0.2 per cent in July. In the twelve months to September, the Inflation Gauge increased by 2.4 per cent, following a 2.2 per cent rise for the twelve months to August.
Contributing to the overall change in September were price rises for fruit and vegetables, domestic holiday travel and accommodation, and automotive fuel. These were offset by falls in rents, footwear, and audio, visual and computing equipment and services. The price of fruit and vegetables rose by 6.3 per cent in September, driven mostly by the latter.
The trimmed mean of the Inflation Gauge increased by a very modest 0.1 per cent in September, following a 0.6 per cent increase in August, to be 2.3 per cent higher than a year earlier.
According to Annette Beacher, Head of Asia-Pacific Research at TD Securities, “With this September report we have finalized our CPI forecasts for the September quarter. We forecast headline inflation to increase by 0.8 per cent, to be 1.4 per cent higher than a year ago. We forecast underlying inflation to increase by 0.5 per cent in the quarter, lifting the annual rate slightly from 2.0 per cent to 2.1 per cent. By year end, we anticipate underlying inflation to remain closer to 2 per cent than 2.5 per cent “We have still not noticed any broad-based impact of the 1 July introduction of carbon pricing spilling over into prices this month. However, we will continue to watch for any evidence of more pass through to consumers in the months ahead.
