Inflation rises by a higher than expected 1.4% over September quarter, up 2% year-on-year: ABS

The Consumer Price Index (CPI) rose 1.4% in the September quarter compared with a rise of 0.5% in the June quarter,  according to the latest ABS figures.

Economists had forecast a 1% rise over the quarter.

Year-on-year inflation is now up 2% compared with a rise of 1.2% through the year to the June quarter - and above expectations of a 1.6% year-on-year rise in the September quarter.

This is the largest quarterly rise since the March quarter 2011 (+1.4%) and the largest annual rise since the December quarter 2011 (+3.0%).

However, it is still within the RBA’s target inflation range averaging between 2% to 3% - "a rate of inflation sufficiently low that it does not materially distort economic decisions in the community".

The most significant price rises in the September quarter 2012 were for electricity (+15.3%), international holiday travel and accommodation (+6.6%), medical and hospital services (+4.5%), vegetables (+10.5%) and gas and other household fuels (+14.2%).

The most significant offsetting price falls were for automotive fuel (–3.9%), motor vehicles (–1.0%), pharmaceutical products (–2.6%), domestic holiday travel and accommodation (–1.3%) and other financial services (–0.9%).

The ABS says it is unable to quantify the impact of the carbon price on greenhouse emissions, introduced at $23 per tonne on July 1.