Economy
Australian inflation hits 4.0% on fuel prices, core measure cools
Australia's headline CPI rose to 4.0% year-on-year in August as fuel prices surged, matching forecasts, while the trimmed mean core measure came in softer than expected at 0.2% month-on-month.
The Australian dollar fell after the data, as the softer-than-expected trimmed mean reading was seen as more encouraging for inflation. Markets are now pricing only around a 25% chance of a November rate hike, well below Westpac's stated base case that the Reserve Bank of Australia follows up next month.
For beginners Headline inflation can be distorted by volatile items like fuel, so central banks often focus on core measures such as the trimmed mean, which strip out extremes to gauge underlying price pressure before deciding on interest rates.