The Reserve Bank is not expected to begin cutting interest rates until next year, despite Australia’s inflation rate falling in new figures released week.
Annual inflation figures released by the Australian Bureau of Statistics on Wednesday showed Australia’s headline consumer inflation rate has moderated to 2.7 per cent, the slowest increase since August 2021.
The drop in the inflation figure spanning the 12 months to August was spurred by a decrease in transport (-1.1 per cent) while housing (2.6 per cent), food and beverages (3.4 per cent) and alcohol and tobacco (6.6 per cent) brought it higher.
Interest rate hikes have sought to take the wind off the back of the economy and slow inflation to the central bank’s target range of two to three per cent.
The consumer price index fall released on Wednesday was too late for the Reserve Bank after it decided to keep interest rates on hold at 4.35 per cent on Tuesday this week.
The RBA pays most attention to underlying inflation when making rates decisions.
The volatility of the monthly figure makes it less influential than the quarterly one, next due in October, RBA governor Michele Bullock said.
Inflation was 3.8 per cent over the 12 months to the June 2024 quarter.
– AAP
