Australia’s annual inflation rate jumped to 4.3% in September, up from 4.0% in August, keeping pressure on the Reserve Bank ahead of Tuesday’s interest rate decision.

Market expectations for another rate rise next week – which would be the fifth this year – surged to 80% after the inflation report.

Petrol and holiday costs helped drive the increase. But the more important test for the bank was underlying inflation: the RBA’s preferred measure of quarterly inflation, the quarterly trimmed mean, rose 1.0%, up from 0.8% in June.

Fuel and travel costs are pushing up prices

The headline consumer price index (CPI) rose 0.6% in September, the Australian Bureau of Statistics reported. The biggest driver was automotive fuel prices, which jumped 9.4% in the month as world oil prices increased, leaving them 23.6% higher than a year earlier.

Domestic holiday travel and accommodation rose 8.0% in September, reflecting school holidays and major sporting events. These increases help explain the headline increase — without establishing that every part of the economy is overheating.

Housing inflation actually eased to 5.2% annually, down from 5.7% in August. New dwelling prices were unchanged over the month as builders’ discounts offset increases in base prices. Electricity prices remained 12.8% higher over the year,........

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