Economy

Jul 27, 2016

CPI: odds on a rate cut strengthen off tepid inflation

A low Consumer Price Index result suggests the Reserve Bank might cut interest rates again but it will be looking at underlying measures, not the headline rate, Glenn Dyer and Bernard Keane write.

reserve bank

Nothing is meant to be easy these days in economic policymaking, as this morning’s Consumer Price Index data demonstrates. Unlike the very obvious rate cut-justifying March quarter reading of minus 0.2%, CPI bounced back into positive territory in the three months to June with a rise of 0.4% in headline inflation. That was right on market forecasts, but the annual rate dipped to 1.0%, the lowest annual rate since 1999, when John Howard was in his second term.

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One thought on “CPI: odds on a rate cut strengthen off tepid inflation

  1. Yclept

    Oh why don’t they just cut it to zero and hasten the flow of self funded retirees on to the pension. That should help things along…

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