(Image: AAP/Deam Lewins)

With inflation remaining stubbornly low and below the Reserve Bank's target band, the momentum for an interest rate cut this year increased yet further yesterday. December quarter inflation was 0.5% and inflation for 2018 was 1.8%; the trimmed mean and the weighted media, which the RBA prefers, were 1.8% and 1.7% respectively.

To reinforce the point, the December quarter data showed yet again that it is governments that are the main threat to consumers' wallets. As AMP's Shane Oliver noted that "inflation in the private sector of the economy, excluding volatile items, is running at 1.5% over the year (as measured by the 'market goods and services ex volatile items' index). In contrast, inflation in the government-influenced areas is much higher with education up 2.7% year on year, urban transport fares +2.5%, health +3.3%, gas +3.2% and tobacco costs up by +15%."