CPI number lifts hike fears

SYDNEY - Australia's consumer prices rose faster than economists expected in the third quarter, driving up the nation's currency as traders bet the central bank will raise interest rates next month.

The consumer price index climbed 0.9 per cent in the three months ended September 30 after gaining 1.6 per cent in the second quarter, the Bureau of Statistics said in Sydney yesterday. The annual rate was 3.9 per cent.

The Reserve Bank of Australia, which raised borrowing costs in May and August after inflation breached its target range for the first time in more than three years, will move again on November 8, most economists say.

Bank governor Glenn Stevens said this month his "main job" was to "see off" persistent inflation.

"Today's number is worse than expected and it tips the probability over toward a rate rise," said Shane Oliver, chief economist at AMP Capital Markets. "The Reserve Bank has indicated they are concerned about inflation risks."

- BLOOMBERG