It's looking increasingly likely that luckless punters won't be the only Australians copping a nasty hit to their hip pocket on Melbourne Cup day.
Higher-than-expected inflation data for the September quarter released today has market analysts predicting the Reserve Bank will hike interest rates when they next meet on November 7, just half an hour before the race that stops the nation.
The figures today came less than 24 hours after governor Michele Bullock warned the central bank "will not hesitate to raise the cash rate" for a 13th time if CPI doesn't come back to its 2-3 per cent target band quickly enough.
Given the quarterly rise of 1.2 per cent was higher than market forecasts, that seems to be exactly what is happening – and there was even more concerning reading in the ABS's inflation data.
"The bigger upside surprise today was in the core readings of inflation – mainly the 'trimmed mean' which is the RBA's preferred measure," AMP deputy chief economist Diana Mousina said.
"[It] was up by 1.2 per cent over the quarter (above consensus estimates of 1 per cent and our own forecast of 1.2 per cent) which took annual growth to 5.2 per cent and was up from a 1 per cent rise last quarter.
"Annual growth in trimmed mean inflation slowed to 5.2 per cent from 5.9 per cent last quarter and is lower than the peak of 6.8 per cent in December last year.
"However, this is quite a miss from the RBA's forecasts of 4.8 per cent annual growth and we think will concern the central bank because it could indicate that inflation is proving too 'sticky'."
She says the data will force Bullock and her board to hike rates by a quarter of a percent.
"We think today's inflation figures will cause some concern for the central bank and is likely to push the RBA over the line to hike the cash rate by another 0.25 per cent," Mousina said.
Bank of Queensland (BOQ) chief economist Peter Munckton agrees.
"Another rate hike is imminent, particularly given that Australia's cash rate is about one percentage point below that of peer countries," he said.
"To me, this makes a move at the November board meeting look likely."
However, while AMP, BOQ and other market analysts are predicting a hike, Mousina cautioned the Reserve Bank against moving in November.
"We think that RBA needs to allow more time for the full lags of monetary policy to work through the economy and risks a significant slowing in economic growth in 2024 if it continues to raise interest rates," she said.
