Australia's headline inflation has surged to 7.3 per cent, the highest annual increase since 1990.
The Consumer Price Index (CPI) rose 1.8 per cent in the September 2022 quarter lifting the annual figure to 7.3 per cent, according to the latest data from the Australian Bureau of Statistics.
The figures - both quarterly and annual, exceeded economists' and market expectations of 1.6 per cent and around 7 per cent respectively, increasing the chance of more rate hikes by the the Reserve Bank of Australia.
Annual trimmed mean inflation, which is the RBA's preferred inflation gauge, was the highest since the series commenced in 2003, increasing to 6.1 per cent, up from 4.9 per cent in the June quarter. This is also higher than the upper bound of the RBA target range of 2-3% and the 6 percent year-end forecast in the RBA's rate planing.
The new reality may force the RBA to go for a 50 percentage point rate hike at its November meeting to curb runaway inflation and people's inflation expectations.
In his budget night speech, Mr Chalmers acknowledged inflation is predicted to reach just under 8% and Real wages to remain stagnant before beginning to slowly grow again in 2024.
