What the experts say about the latest inflation data - and what it means for interest rates
BRIAN REDICAN, SENIOR ECONOMIST, MACQUARIE
"There were more price falls than many expected, perhaps reflecting competitive discounting by the big supermarket chains and the impact of the high Aussie dollar. This is great news for anybody with a mortgage. It means there's absolutely no urgency now to raise rates next week. And particularly as the Federal Reserve meets just afterwards and could launch more quantitative easing. Also, inflation is starting from a lower base than many expected, suggesting the pace of future rate increases could be slower."
MICHAEL BLYTHE, CHIEF ECONOMIST, CBA
"Inflation looked well contained, it's a bit better than the Reserve Bank had expected and it reduced the chance of any near-term rise in interest rates. Rates will still have to go up but the need for a rate rise next week looks a lot less convincing. There's a good chance the RBA will stay on the sidelines. This will be a trigger for the Reserve Bank to redo its forecasts. Rates still have to go up at some point, but it's a month-by-month proposition and it will depend on the data flow. If the Reserve Bank skips November, that puts the focus on December -- and the pressure there will be greater given that the Reserve Bank has no meeting in January."
STEPHEN WALTERS, CHIEF ECONOMIST, JPMORGAN
"At face value, it looks okay but when you dig a bit deeper they are not that sanguine. We still think the RBA will hike next week. We never argued that this is a tipping point on these numbers. We always thought the medium-term story is why they are hiking so it doesn't change our view on that. The risks have gone down a little bit, clearly. If you had a big inflation number that would have made the odds higher but we think the argument is still there."
ANNETTE BEACHER, SENIOR STRATEGIST, TD SECURITIES
"This buys the RBA a bit more breathing space. There are enough factors on their side to stay their hand for another month, though we are pencilling in a December hike to signal the next move is up.
"We are looking at next week rates unchanged, it is prudent for the RBA to sit for another month as there are a lot of global monetary policy decisions next week.
"But we do see inflation at 3.5 percent at this time next year, so we are still looking at 100 basis points of tightening over the next year. That is mainly domestically sourced inflation, given capacity constraints in the labour and capital markets, and at some point the lack of productivity growth will start to creep through into wage pressures."
PAUL BRENNAN, HEAD OF MKT ECONOMICS, CITI
"It was a good set of numbers, with the headline better than expectations, so the Reserve Bank will be very pleased with these figures, it allows them to continue to pause another month."
"So the things they'd be looking for to trigger a rate rise would be unemployment falling further, or strong GDP figures."
"But these figures lift the bar on what's required from unemployment or GDP to trigger a rise in December."
ROB HENDERSON, CHIEF ECONOMIST MARKETS, NATIONAL AUSTRALIA BANK
"It's probably at the low end of what the RBA was expecting.
"There is no justification for an increase in interest rates in November...we think the chance of a November hike is quite low but we still think December is a live month for a rate hike.
"We probably need to see stronger activity numbers between now and December to lead to an increase in rates in December."
Reuters