Australia inflation spikes, rate cut in doubt

Australian consumer prices rose a surprisingly large 1.4 per cent in the third quarter as energy costs spiked on the introduction of a carbon tax, sending the local dollar higher as the market pared expectations on the speed and scale of further rate cuts.

The Australian dollar rose a quarter of a cent as the market lengthened the odds on another cut in the 3.25 per cent cash rate next month. Yet a move to 3.0 per cent remains fully priced in by Christmas, in part because much of the jump in inflation was due to one-off government measures.

via Business feed http://www.scmp.com/business/economy/article/1068579/australia-inflation-spikes-rate-cut-doubt