Economists are eagerly awaiting the release of the September quarter Consumer Price Index (CPI) data from the Australian Bureau of Statistics (ABS) this Wednesday. The CPI figures will be critical for the Reserve Bank’s decision on whether to raise interest rates, with some economists predicting a rate hike as soon as November 7.

According to Westpac, the headline and ‘trimmed mean’ figures are expected to come in at 1.1% for the quarter and 5.3% and 5% for the year, respectively. The trimmed mean is a measure of inflation preferred by the Reserve Bank as it excludes the most volatile price movements. However, there are uncertainties about how much temporary electricity bill rebates and permanently increased childcare subsidies will offset price rises in those sectors, making forecasting more challenging.

CBA’s forecast for inflation is slightly lower, at 0.9% for the headline and 1% for the trimmed mean. They believe that if the result aligns with their forecast, the RBA is likely to keep rates on hold in November. However, CBA economists warn that there are risks to the upside for inflation, and a higher-than-expected result could lead to a rate hike of 0.25%pt next month.

UBS’s forecast is even higher, at 1.2% for the headline and 1.1% for the underlying result. This would add more pressure for a rate rise. ANZ’s economists see the result as being 1.1% for the headline and 1.2% for the trimmed mean, which they believe could also lead to another rate hike.

The typical forecast from a survey of economists by Reuters is for both headline and trimmed mean inflation to rise 1.1% in the quarter, or 5.3% and 5% respectively over the past year. Financial markets are currently pricing in about a 30% chance of the RBA increasing the cash rate in the near future.

Overall, the CPI data release will be closely watched by economists and could have implications for the Reserve Bank’s decision on interest rates.