Perth’s annual inflation rate has hit its highest mark in nearly three years, driven by rising electricity prices in the September quarter, according to the latest data from the Australian Bureau of Statistics.
Perth’s annual inflation rate has hit its highest mark in nearly three years, driven by rising electricity prices in the September quarter, according to the latest data from the Australian Bureau of Statistics.
Perth’s consumer price index grew 1.2 per cent in the 12 months to September, with a 0.5 per cent increase in the past three months.
It marks Perth’s highest inflation rate since a 1.5 per cent increase in December 2015.
“The main contributors to the rise in Perth this quarter are electricity (+7.3 per cent), international holiday travel and accommodation (+3.6 per cent and water and sewerage (+4.9 per cent),” the ABS said.
“The rise in electricity is in line with announced increases in electricity tariffs.
“The rise is partially offset by falls in child care (-11.5 per cent) and rents (-1.6 per cent).
“The fall in rents is due to an excess of housing stocked continuing to lead to high vacancy rates.”
Perth's inflation rate remains the lowest in the country, slightly below Darwin (1.3 per cent), while Hobart (2.7 per cent) and Canberra (2.5 per cent) top the nation.
Nationally, the headline CPI crawled at 1.9 per cent for the year, in-line with forecasts but below the 2.1 per cent pace in the second quarter.
Core inflation has now undershot the RBA's long-term target band of two per cent to three per cent for the 11th quarter on the trot, the longest run of misses on record.
As a result, the RBA has kept interest rates at an all-time low of 1.5 per cent since August 2016.
Interest rate futures do not fully price in a hike to 1.75 per cent until March 2020.
Analysts said the RBA is likely to look through the weakness in the third-quarter data as it was well flagged and included some one-off price decreases in government-administered services such as child care.
"But if Q4 is low it would be material for the RBA's 'next move is up' view," said George Tharenou, Sydney-based economist at UBS.
RBA Governor Philip Lowe has repeatedly signalled the next move in interest rates will be an increase.
The last time the RBA tightened policy was in November 2010 to 4.75 per cent.
"Despite strong gross domestic product growth and falling unemployment, low CPI and (easing) house prices...(will) keep the RBA on hold till 2020," Tharenou wrote in a note to clients.
Australian government bond futures slipped, with the three-year bond contract down 1.5 ticks at 97.955.
The 10-year contract eased 3.5 ticks to 97.375.
