The inflation rate witnessed a greater-than-anticipated decline in October, settling at 3.8 percent, yet it remains above the Reserve Bank of Australia’s (RBA) desired range between 2 and 3 percent.

Economists cautioned that a surge in inflation would indicate an imminent interest rate hike within a few weeks.

Core inflation saw a minor decrease, reaching 3.2 percent, aligning with the forecasts of economic experts.

The quarterly inflation data for December, expected to be published in late January, will play a crucial role in shaping the RBA’s decisions in their early February meeting.

In its monetary policy statement, the RBA highlighted its vigilant observation of how the economy adjusts to three interest rate reductions over the past year.

In its monetary statement, the RBA said it was carefully watching how the economy was responding to three interest rate cuts in the past 12 months.

Treasurer Jim Chalmers said at the time it was the “expected result”.

“A lot of Australians would have wanted some more rate relief but they wouldn’t have expected it,” he said.

“There was, in the estimations of the market and economists, no chance of a rate cut today and that is what we have seen in this decision taken independently by the Reserve Bank.”