Consumer price figures this week are expected to show inflation has overshot the Reserve Bank’s forecasts for nine of the past 12 months.
Consumer price figures due this week are expected to show underlying inflation has overshot the Reserve Bank of Australia’s forecasts for nine of the past 12 months, putting pressure on the central bank to consider an interest rate rise.
Market economists expect the headline annual consumer price index to have accelerated in the June quarter, from 3.6 per cent to 3.8 per cent.The RBA’s preferred measure of underlying inflation, trimmed mean CPI which strips out the most volatile price items, is tipped to remain stuck at 4 per cent, according to the average forecast of leading market economists.
UBS economist George Tharenou said the June quarter would mark the 13th consecutive quarter of the annual CPI being above the RBA’s 2 per cent to 3 per cent target range. “A headline CPI figure over 4 per cent will most likely trigger a rate rise, unless the trimmed mean stays flat or ticks down,” he said.
The unemployment rate has drifted higher from a near-50 year low of 3.5 per cent last year to 4.1 per cent in June, but is still very low by historic standards.
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