South Korea October headline inflation moderates ahead of expected rate hike

The logo of the Bank of Korea is displayed at the Bank of Korea head office in Seoul, South Korea, October 28, 2026. REUTERS/Kim Soo-hyeon

The logo of the Bank of Korea is displayed at the Bank of Korea head office in Seoul, South Korea, October 28, 2026. REUTERS/Kim Soo-hyeon

SEOUL, Nov 3 : South Korea's headline inflation slowed in October, government data showed on Tuesday, providing a slight reprieve for central bankers but remaining firmly above target.

Consumer prices rose 2.8 per cent year-on-year in October, down from a 2.9 per cent gain in September and nearly matching a 2.85 per cent increase forecast in a Reuters poll of economists.

The consumer price index rose 0.2 per cent on a monthly basis after gaining 0.3 per cent in the previous month, the data showed.

While the slower growth offers the Bank of Korea a brief respite, inflation remains well above its 2.0 per cent target.

Amid elevated global energy prices and rising household borrowing, the BOK is widely expected to hike rates in the coming months, maintaining its tight monetary posture to calm persistent inflationary pressures in Asia’s fourth-largest economy.

A separate poll showed consensus forecasts put the peak policy interest rate at 3.50 per cent, which prices in one more hike this November and another in the first quarter of 2027.

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