Inflation in Australia hits 32-year high

Inflation in Australia has reached its highest level since 1990, while pricing in interest rate hikes has also increased. Inflation in Australia rose to a 32-year high in the third quarter as construction and natural gas prices rose, increasing pricing that the central bank would begin high-rate interest rate hikes again. Consumer prices in Australia increased by 1.8 percent in the quarter ending in September. Economists who participated in a Bloomberg survey expected the increase to be 1.6 percent. Annual inflation, on the other hand, rose from 6.1 percent to 7.3 percent, hitting the highest level since 1990 and rising nearly three times as much as the increase in wages. Closely monitored core inflation rose by 1.8 percent in the quarter, bringing the annual increase to 6.1 percent. Market expectations were for an annual increase of 5.5 percent. After four consecutive 50 basis point rate hikes, the Reserve Bank of Australia (RBA) surprised markets by slowing the pace of rate hikes this month to 25 basis points.