Perth prices rose 1.8 per cent in the September quarter, the sharpest lift since June 2006, after a big fall during the COVID-19 shutdown.
Perth prices rose 1.8 per cent in the September quarter, the sharpest lift since June 2006, after a big fall during the COVID-19 shutdown.
Inflation was 0.9 per cent over the year to September, according to the Australian Bureau of Statistics.
Prices in Perth fell 1.2 per cent in June.
Nationally, inflation was 1.6 per cent in the September quarter, taking the price movement across the year to be 0.7 per cent.
The biggest driver in both the June fall and September lift was childcare prices, the ABS said.
Childcare was briefly subsidised for a period by the federal government during the shutdown.
Economists were confident that there was not yet inflation pressure building in the economy.
HSBC chief economist Paul Bloxham said the fall and rise in recent months had largely been driven by childcare policy.
“A fall and subsequent rise in petrol prices was also a driver of the sharply lower and then sharply higher CPI figures,” he said.
“The best way to assess the pulse of inflation and look through the volatility is to focus on the underlying measures.
“Here the picture is one of a bit more stability, but it is still the case that underlying inflation is well below the RBA's 2-3 per cent target band.”
Commsec chief economist Craig James said the previous figures in June had been historic.
“The last time consumer prices fell by 1.9 per cent over a quarter, that is, over a three month period, was in 1931,” Mr James said.
“The September quarter CPI marks a partial return to ‘normality’.
“However we will only get a true sense of inflation and where prices are headed in 2021.”
He also said childcare and petrol had been the main drivers.
“Inflation is likely to remain below the Reserve Bank’s two to three per cent target band for a few years,” Mr James said.
“As a result the Reserve Bank commits to not increasing the cash rate for three years.
“In fact today’s inflation result doesn’t stand in the way of a further easing of monetary policy.
“On Melbourne Cup day the Reserve Bank is likely to cut the target rates for cash and three-year bond yields from 25 basis points (quarter of a per cent) to ten basis points.
“The RBA is also likely to commit to purchases of five to ten-year bond yields with the intention of driving longer-term yields lower.”
