Inflation picks up a little faster than expected
Inflation, as measured by the annual change in the consumer price index (CPI), accelerated to 5.1% in September from 4.8% in August.
This was worse than the economists’ consensus of 4.9%, but remained comfortably within the Reserve Bank’s target range of 3%-6%.
The CPI measures changes in the price of consumer goods and services purchased by households in urban areas. On average, prices increased by 0.5% between August and September.
Food inflation continued to moderate. Food and nonalcoholic prices rose 5.5% from a year earlier in September, after a 5.7% increase in August and a 6.8% rise in July.
Economists had expected inflation to edge up in September, due to higher petrol costs and the expected effect of quarterly price surveys of rental inflation and domestic workers’ wages.
Many economists expect inflation to fall to the midpoint of the inflation target range in early 2018 before stabilising at about 5.5% in the second half of the year.
The Reserve Bank did not cut interest rates at the last monetary policy committee (MPC) meeting in September but economists expect a 25 basis point cut in November.