Invest
Rate cut still on the cards as inflation figures released
The official March 2017 quarter inflation figures show the Consumer Price Index is creeping back into the RBA’s ‘target band’ of 2-3 per cent, but a rate cut is not off the table.
Rate cut still on the cards as inflation figures released
The official March 2017 quarter inflation figures show the Consumer Price Index is creeping back into the RBA’s ‘target band’ of 2-3 per cent, but a rate cut is not off the table.
The Australian Bureau of Statistics' (ABS's) March 2017 quarter Consumer Price Index shows inflation rose 0.5 per cent for the quarter and 2.1 per cent year-on-year.
The Reserve Bank of Australia's (RBA's) underlying measure of inflation (the average of the ABS's trimmed mean and weighted median figures) was up 0.4 per cent in the March quarter, with annual growth up 1.8 per cent.
Commenting on the figure, AMP Capital chief economist Shane Oliver said the latest move is slightly below market expectations but a welcome development for the RBA.
"The RBA targets inflation of 2-3 per cent over time, so the latest upward move in underlying inflation would certainly be welcomed by the central bank given that the RBA rate cuts in 2016 were largely in response to very low inflation readings," Mr Oliver said.
Yesterday's ABS figures are consistent with the RBA's inflation forecasts, which predict headline inflation of 2 per cent and underlying inflation of 1.75 per cent by the June quarter.
"While the March quarter inflation result slightly disappointed expectations, the RBA would be happy that inflation is moving in the right direction (into its 2-3 per cent target band)," Mr Oliver said.
"But underlying inflation is still too low and will probably remain below the RBA’s target band for the majority of 2017. Wages growth still remains around record lows, the economy is running below-trend which indicates that spare capacity exists and the Australian dollar remains too high, all which will keep a lid on underlying inflation.
"Our base case is that with inflation moving in the right direction and given the RBA’s increased emphasis on an inflated Sydney and Melbourne housing market and rising household debt, the RBA is unlikely to make any adjustments to interest rates any time soon and we expect it to keep the cash rate at 1.5 per cent for the next year at least.
"However, low underlying inflation pressures mean that there is still more chance of a rate cut this year than a rate hike."
Spending
Aussies splash record cash for Black Friday and Cyber Monday
More than $8 billion was spent between the two shopping holidays, according to NAB estimates. ...Read more
Spending
Festive shopping expected to be bigger and earlier than ever
Australians are set to spend $60 billion at retailers across the country. ...Read more
Spending
Aussies’ spending on subscription rises, but will it stick?
Aussies carved out a greater slice of their spending budgets when it came to streaming services during the pandemic. ...Read more
Spending
Qantas announces $2.3bn loss but plans to be flying again by Christmas
Australia’s national carrier has revealed the devastating impacts border closures have had on the company, while noting a possible return date to international operations in its full-year market upd...Read more
Spending
Will your frequent flyer status be impacted by COVID?
In the latest bid to kick-start the travel industry post-lockdowns, Australia’s largest airline has announced that it is rewarding its frequent flyers by extending their status. ...Read more
Spending
‘Technology, not taxes’: Why not both?
The government has joined the rest of the world in looking to offset carbon emissions, albeit through technology, not taxes, despite the possibility that positive taxes and incentives could potentiall...Read more
Spending
Social media spending balloons to $118bn
Australians are spending a whopping $118 billion on discretionary items through social media and apps, fresh figures have revealed. ...Read more
Spending
Why payphones are set to become free
Australians will now be able to make free calls from any Telstra payphone under a new initiative aimed at helping those who are in need, Telstra’s CEO has revealed. ...Read more
What Omicron means for property, and are units right for first-time buyers? What is equity crowdfunding? Are industry super funds tapping into member funds to save their skins?
Listen now
Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now
Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now
How the post-lockdown period will influence property, what the soaring NFT market means, and defining financial wellness
Listen now
Spending
Aussies splash record cash for Black Friday and Cyber Monday
More than $8 billion was spent between the two shopping holidays, according to NAB estimates. ...Read more
Spending
Festive shopping expected to be bigger and earlier than ever
Australians are set to spend $60 billion at retailers across the country. ...Read more
Spending
Aussies’ spending on subscription rises, but will it stick?
Aussies carved out a greater slice of their spending budgets when it came to streaming services during the pandemic. ...Read more
Spending
Qantas announces $2.3bn loss but plans to be flying again by Christmas
Australia’s national carrier has revealed the devastating impacts border closures have had on the company, while noting a possible return date to international operations in its full-year market upd...Read more
Spending
Will your frequent flyer status be impacted by COVID?
In the latest bid to kick-start the travel industry post-lockdowns, Australia’s largest airline has announced that it is rewarding its frequent flyers by extending their status. ...Read more
Spending
‘Technology, not taxes’: Why not both?
The government has joined the rest of the world in looking to offset carbon emissions, albeit through technology, not taxes, despite the possibility that positive taxes and incentives could potentiall...Read more
Spending
Social media spending balloons to $118bn
Australians are spending a whopping $118 billion on discretionary items through social media and apps, fresh figures have revealed. ...Read more
Spending
Why payphones are set to become free
Australians will now be able to make free calls from any Telstra payphone under a new initiative aimed at helping those who are in need, Telstra’s CEO has revealed. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
