South Korea Inflation Hits Highest Since July , Bolstering Case for Steady Rates

South Korea's consumer inflation accelerated in October as a weakening won drove up food and energy costs, reinforcing the central bank's rationale for holding interest rates steady amid a burgeoning housing market. Consumer prices ROSE 2.4% year-over-year, up from September's 2.1% and exceeding economists' median forecast of 2.2%. The print marks the highest reading since July 2024's 2.6% spike.

Core inflation—stripping out volatile food and energy components—climbed to 2.2%, maintaining pressure on the Bank of Korea as both headline and Core measures now exceed its 2% target. The monetary authority has kept its benchmark rate unchanged through three consecutive meetings, balancing Trump-era tariff headwinds against overheating asset markets and household debt risks.

"The BOK's focus will likely shift to long-term inflation expectations rather than transient supply shocks," said economist Bum Ki Son. The won's depreciation has amplified imported price pressures, particularly for energy commodities that face inelastic demand.