Inflation inching upward but still no danger
INFLATION is expected to remain benign despite the weaker Australian dollar, giving the Reserve Bank scope to cut the cash rate further.
The TD Securities/Melbourne Institute Monthly Inflation Gauge rose 0.2 per cent last month, following a 0.1 per cent rise in August and an increase of 0.5 per cent in July. The rate for the 12 months to September was 2.1 per cent.
Underlying inflation is expected to remain in the bottom half of the RBA’s 2 per cent 3 per cent target band to the end of the year, TD Securities head of Asia-Pacific research Annette Beacher said. ‘‘We forecast underlying inflation to rise by 0.5 per cent in the quarter, for an annual rate of 2.1 per cent,’’ she said. TD said the September result was driven by price rises for fruit, which increased 3.2 per cent, as well as vegetables, alcohol and electronic equipment.