The June quarter inflation data was always going to be important to the bank. Thirteen months after it started lifting interest rates,it had to see some sign that all that monetary policy action was really starting to work.
On numerous counts,those signs were delivered in spades. The headline rate,at 6 per cent,was below market expectations and well short of the bank’s own forecasts of a 6.3 per cent annual rate.
Both measures of underlying inflation were under 6 per cent. Measures of inflation for discretionary spending were lower than the headline rate. Even the volatile monthly measure of inflation,also released on Wednesday,continued to slip and now sits at 5.4 per cent.
Loading
Yes,some goods are still going up. Australians can’t live on bread alone – they can’t afford to,with the price of a loaf climbing bya record-breaking 14 per cent over the past year.
Insurance,for reasons way outside the control of the central bank,is climbing at its fastest pace since the introduction of the GST. In Brisbane alone,the cost of insuring a home,its contents or a vehicle has shot up by 17.1 per cent since July 2022.
The Reserve Bank has been worried about price pressures for services. The annual rate revealed in the data showed this climbing to 6.3 per cent.