Prices rises in Australia are getting smaller and smaller, further easing any pressure for an interest rate rise.
According to the latest TD Securities–Melbourne Institute Monthly Inflation Gauge, inflation was flat in August following a rise of 0.2% in July and a flat result in June.
In the twelve months to August, the inflation gauge rose by 2.5% following a 2.6% increase over the twelve months to July.
Changes in August include price rises for fruit and vegetables (+2.3%), furniture and furnishings (+1.3%), and newspapers, books and stationery (+3.8%).
These were offset by falls in health (-0.8% ), automotive fuel (-3.5%), and holiday travel and accommodation (-1.2%).
Annette Beacher, Head of Asia-Pacific Research at TD Securities, says inflation pressures have moderated in the quarter.
“The impact of the repeal of the carbon tax will only be evident with more data points, with utility prices unchanged this month after the usual July upward adjustment,” she says.
“The RBA continues to express uncertainty about Australia’s economic health once the mining boom ends, hence for tomorrow’s board meeting we expect more of the same stability in interest rates and hitting the exchange rate with a feather via “it remains high by historical standards”.
“At least with inflation remaining comfortably within the target band, we can all resume monitoring local data and global events.”
The latest Australia Bureau of Statistics numbers, the June quarter, put inflation at 3%.
Here’s the annual movement of the TD Securities–Melbourne Institute Monthly Inflation Gauge:
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