Households are almost certain to be spared another rate rise when the Reserve Bank’s board convenes for its final meeting of 2023 next week after inflation eased.
The latest consumer price index figures, released by the Australian Bureau of Statistics on Wednesday, showed annual inflation eased to 4.9 per cent in October, after prices grew by 5.6 per cent in the year September.
The result undershot economists’ expectations of a 5.2 per cent increase.
The moderation of price pressures will come as welcome news to household borrowers who are struggling to keep up with repayments after stomaching 13 rate rises since last May.
But analysts warned the ABS monthly CPI indicator did not provide a full picture of the price pressures across the economy.
Due to an overrepresentation of the prices of goods, the indicator did not fully account for still-high services inflation, so it would be of little use in gauging the domestic sources of inflation the RBA is now focused on.
While markets were pricing just an 11 per cent chance of a rate hike on December 5 ahead of the data release, there is a 68 per cent chance of a hike to 4.6 per cent by June 2024.
