Skyeast Investment Corporation

A gauge of Australia's inflation showed that consumer prices had risen to the top end of the Reserve Bank of Australia's 2-3% target range in August.

Reports said the TD Securities - Melbourne Institute annual inflation gauge rose to 3% from 2.8% in July. On a monthly basis, consumer prices rose 0.2%, after the 0.1% rise in the prior month.

The rise was driven by higher prices for food, alcohol & tobacco, and furniture & furnishings. These were partly offset by lower prices for meat & seafood and holiday travel.

"The inflation gauge is telling us that the mid-year return to trend economic growth, the income surge from the terms of trade boom and ongoing tight labor market are yet to translate into worrisome price pressures," said Annette Beacher, senior strategist at TD Securities.

She added that the RBA can "easily sit tight" on interest rates for the remainder of the year, as lending rates were already around historic average levels. (Provided by RTTNews)