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CPI increases in September quarter

28 October 2009 Reporter

The consumer price index (CPI) has increased by 1 per cent over the September 2009 quarter, fueling speculation that the Reserve Bank will raise rates by 50 basis points at the November Board meeting.

But Housing Industry Association (HIA) senior economist Ben Phillips said the moderately higher than expected CPI does not provide the Reserve Bank with a reason to hike interest rates.

“Such a result is hardly a sign of inflation running out of control. Large interest rate hikes should be viewed as both unnecessary and dangerous and will likely dampen the much needed housing recovery, especially rental investment, across the country,” Mr Phillips said.

“Supply side constraints are continuing to place undue pressure on housing rents and home values, especially but not solely in Australia’s capital cities. Reducing the obstacles to boosting Australia’s housing supply is a fundamental policy challenge.”

CPI increases in September quarter
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