What prices are rising the fastest? | The Business | ABC NEWS
The chance of another rate rise from the RBA in August is now near-zero, according to financial markets. Inflation rose 3.8 per cent in the 12 months to June, undershooting forecasts of 4 per cent.
The slowdown in inflation has coincided with fuel prices falling for three months in a row. But economists say it is too early to assume that an economy-wide slowdown in inflation is in train.
The measure the Reserve Bank watches, underlying inflation, remained steady at 3.6 per cent – but it is still well above the RBA’s target.
Westpac chief economist Luci Ellis thinks the central bank board will still be hawkish and not rule out further rate hikes at the August meeting.
“If we see another kick-up in inflation in the next quarter or two, we think they might move. We do think it’s a fairly finely balanced decision. Inflation is too high,” she said.
In the year to June, the main driver of inflation was housing, with power bills soaring as energy rebates ended. The cost of building new homes accelerated as builders passed on higher material costs linked to the Middle East war. Food and rents also rose above 3 per cent.
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