Australia’s inflation rate fell to 6.9% in October, down from 7.3% the month before, according to new data from the Australian Bureau of Statistics.
The reason the Reserve Bank of Australia (RBA) has increased official interest rates for seven consecutive months – and is likely to do so again at its next meeting, on December 6 – is to reduce spending and therefore dampen inflation.
The RBA is trying to drive down inflation to its target range of 2-3%.
While the latest inflation result is encouraging, it’s too early to say inflation is trending down, as the RBA has forecast that inflation will peak at about 8% in December.
The sooner the RBA believes it has tamed inflation, the sooner it will stop raising rates.