Housing Industry Association (HIA) claimed that a moderately higher than expected consumer price index result does not provide an excuse for the RBA to rush ahead with a large interest rate hike next week.

"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," commented Ben Phillips, HIA Senior Economist.

The consumer price index increased by 1 per cent over the September 2009 quarter, to be just 1.3% ahead of the same period 12 months ago. The RBA's preferred "underlying" measures increased by 0.8% over the September quarter to be on average 3.5% higher than a year ago.

The vast majority of the increase in the headline consumer price movement was a strong jump in the interest rate insensitive energy sector. Housing also moved further north, with housing rents continuing to grow in September and house purchase of new dwellings jumping by 1.1% over the quarter.

29 October, 2009