Australian inflation rebounded to 7.3% in November last year

The monthly consumer price index released by the Australian Bureau of Statistics (ABS) on January 11 showed that inflationary pressures remained strong, with inflation picking up to 7.3% in September from 6.9% in October last year in the 12 months to November last year same level. Michelle Marquardt, head of price statistics at the Bureau of Statistics, said the 7.3 per cent inflation rate indicated persistent inflationary pressures. Housing costs rose 9.6 per cent in the 12 months to November, food and drink prices rose 9.4 per cent and transport costs surged 9 per cent.

"Housing costs were the main factor behind the annual increase in the monthly CPI indicator in November. High labor and material costs contributed to the annual increase in new dwelling prices (+17.9%), despite a similar increase from October's 20.4% annual increase," Marquardt said. The pace of price growth for new dwellings has slowed in comparison." Meanwhile, prices for food and non-alcoholic beverages rose 9.4 per cent, with takeaway food and eating out also being the main drivers of growth. The reinstatement of the fuel excise has pushed up fuel costs and led to higher prices for travel, including flights.

Holiday and travel costs typically fall in November as school holidays come to an end, but the month bucked the trend, recording an annual rise of 12.8 per cent, the second highest for the sector in almost five years, Statistics Office data showed increase.

ANZ senior economist Tim Brell (Adelaide Timbrell) said the Reserve Bank may raise interest rates again by 0.25% in February this year. The latest CPI data "reinforces our view that the peak cash rate will be at least 3.85 per cent", he said.

ANZ expects the Reserve Bank will raise the cash rate by 0.25% at its February meeting and will then opt for two more hikes by May, keeping the cash rate at 3.85%.