Petrol the culprit after bowser bounce pushes up inflation
Inflation bounced back to 5.2 per cent in the 12 months to August and for that we can thank petrol price rises and other volatile items, according to the Australian Bureau of Statistics.
Sep 27, 2023, updated Sep 27, 2023
Rising petrol prices have had a major impact on the latest inflation figures. (AAP Image/Diego Fedele) NO ARCHIVING
The bureau pointed out that if you looked past those issues in the so-called headline rate, to the underlying rate then the annual rise of 5.5 per cent was actually lower than the July rate of 5.8 per cent.
The increase was in line with expectations and was unlikely to impact on the interest rate deliberations by the board of the Reserve Bank.
The ABS head of price statistics Michelle Marquardt said the big contributors to inflation were housing (up 6.6 per cent), transport (7.4 per cent), food and non-alcoholic beverages (up 4.4 per cent) and insurance and financial services (up 8.8 per cent).
Automotive fuel costs are up 14 per cent on a year ago and rose 9.1 per cent in August alone.
“The annual movement for Automotive fuel remains volatile, partly reflecting price changes from 12 months ago, when Automotive fuel prices fell 11.5 per cent in August 2022. Price rises this month, combined with base effects, have seen the annual movement for Automotive fuel increase 13.9 per cent in August, compared to a fall of 7.6 per cent in July,” Marquardt said.
Even though housing continued to spike, it is trending down. New dwelling prices rose 4.8 per cent, which was the lowest since August 2021, but rents continue to rise. They were up 7.8 per cent in August from 7.6 per cent in July.
“Food inflation continues to ease although differences remain across the food categories. Prices for bread and cereal products and dairy products have risen over 10 per cent in the past 12 months, while fruit and vegetable prices are 8.3 per cent lower compared to 12 months ago due to improved growing conditions,” Marquardt said.
Economist Stephen Koukoulas all but 0.3ppts of the inflation rate increas was due to petrol which is not monetary policy issue.
“Medium term inflation drivers are pointing to lower inflation – it’s squarely on track to reach RBA target,” he said.
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