OPINION: Inflation remains too high and was accelerating late last year, eliminating the case for a near-term pause in interest rates.
The bottom line is that the Reserve Bank of Australia will be concerned that its preferred measure of underlying inflation – which strips out some volatile items – was above its most recent forecast issued in November.David Rowe
Underling inflation printed at a hefty 1.7 per cent in the December quarter and 6.9 per cent annually. That’s notably higher than the 6.5 per cent the RBA expected and above the 6.1 per cent in the September quarter.“Our hope is that inflation has now peaked, but it will still be higher than we’d like for longer than we’d like even on the other side of it,” Chalmers said.The RBA will be hoping that the ultra-high 9.
There was also evidence that inflation accelerated in December, partly due to the explosion in holidays costs.
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