Australia’s Inflation Surprise Puts Rate-Cut Hopes on Hold

Australia’s consumer price index climbed 3.8% year-on-year in October, surpassing expectations of 3.6%. 

Core inflation (the trimmed-mean measure) also picked up, reaching 3.3% versus 3.2% in September — a sign that inflation isn’t easing as quickly as hoped. 

Housing costs rose notably, and there was a sharp increase in electricity prices after government rebates ended. These factors helped push inflation higher. 

As a result, expectations that the Reserve Bank of Australia (RBA) would cut interest rates soon have been scaled back. Traders are now less confident in a near-term rate cut.

In short: inflation is proving stickier than expected in Australia, which means the RBA may wait longer before easing policy.