RBA Likely to Keep Tightening as Inflation Rate Stays Above Target

Australia's inflation rate cooled in August, but experts say the Reserve Bank of Australia (RBA) is likely to tighten monetary policy further.

CreditorWatch Chief Economist Ivan Colhoun said the trimmed mean consumer price index rose 0.244% month on month in August, down from 0.48% in July, leaving the annual rate at 3.6% for a third straight month.

Colhoun noted that the monthly data appears to be seasonal, with the first month of each quarter tending to run hotter than the following two. He also pointed out that petrol prices rose 14.8% over the month, following the end of fuel excise subsidies and stronger oil prices in August.

In addition, Colhoun mentioned technology-related price increases linked to the surge in artificial intelligence investment. The games, toys and hobbies category rose 12.7% month on month as memory and storage costs increased.