Inflation data: Economists tip a lift in inflation, latest figures could dampen RBA interest rate cut

Crucial inflation figures may be the final piece in the puzzle for the Reserve Bank on what it will do next on interest rates

Inflation data for the September quarter will be released on Wednesday by the Australian Bureau of Statistics, with an uptick likely.

Economists have predicted headline inflation to rise from 2.1 per cent to about three per cent.

The quarterly figures will carry more weight for the Reserve Bank when it considers whether to cut interest rates at its next meeting on Tuesday.

It’s the last major piece of economic data to be released before the decision on rates.

The previous round of quarterly figures for the trimmed mean, the preferred indicator for the Reserve Bank because it removes volatile price changes, came in at 2.7 per cent, the lowest level since December 2021.

“Hawkish comments” from Reserve Bank governor Michelle Bullock meant much was depending on the inflation numbers for any possible rate cut, AMP chief economist Shane Oliver said

He said a rise of 0.6 per cent would be in line with the central bank’s forecasts and imply a rate cut, but an increase of 0.9 per cent would likely mean homeowners miss out on mortgage relief.

CommSec chief economist Ryan Felsman said trimmed mean inflation was likely to rise by 0.8 per cent for the quarter, while the annual growth rate would be steady at 2.7 per cent.

The official cash rate is at 3.6 per cent, with higher-than expected unemployment figures for September boosting expectations of a rate cut.

But Ms Bullock said in a speech on Monday she was relatively unfazed by the jump in unemployment, with signs the jobs market was still tight.