Jan. 14 (Bloomberg) -- A private gauge of Australian inflation advanced in December on costlier gasoline, travel and rent, adding to the case for the central bank to hold rather than cut interest rates.
Consumer prices rose 0.4 percent from November, when they declined 0.1 percent, an index compiled by TD Securities Inc. and the Melbourne Institute released in Sydney today showed. They climbed 2.4 percent in December from a year earlier, near the middle of the central bank’s 2 percent to 3 percent target.
Investors are pricing in a 33 percent chance Reserve Bank of Australia Governor Glenn Stevens and his board will ease monetary policy an additional quarter percentage point at a Feb. 5 meeting. Stevens has cut the overnight cash rate target by 1.75 percentage points since Nov. 1, 2011, to 3 percent to stimulate areas of the economy outside mining, where investment is predicted to peak this year.
“The accommodative monetary policy stance, combined with the less-restrictive fiscal stance, are already providing a significant boost for the Australian economy,” Annette Beacher, head of Asia-Pacific research for TD Securities Inc. in Singapore, said in a statement.
Today’s inflation gauge showed fuel rose 1.5 percent and rents climbed 0.6 percent in December. The costs of clothing and footwear, alcohol and tobacco and meat declined, it showed.
The Melbourne Institute is a research unit of Melbourne University, and TD Securities is a division of Toronto-Dominion Bank, Canada’s second-largest lender. The monthly inflation index measures the prices of more than 1,000 goods and services.
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