Inflation in Australia remains stubbornly above the target range set by the Reserve Bank, although there are signs of a clear downward trend. The latest inflation data will be carefully considered by the Reserve Bank board in its decision on whether to lift interest rates next week.
A key indicator of cost-of-living pressures, inflation tracks the rate of change in the prices of goods and services purchased by Australian households.
The headline inflation was in line with the forecasts of economists, but the surprise came in the data on underlying inflation or trimmed mean inflation"If you focus on a thing called the trimmed mean. It's running at 3.9 per cent. A little bit less than economists were expecting. Most economists were expecting around 4 per cent. So it's actually come down. It was 4 per cent, but now it has come down to 3.9 per cent.
The data will be considered carefully in next week's interest rate decision when the Reserve Bank board meet on Monday and Tuesday. "The Australian Money Market, of the Futures Market, which is how markets are pricing interest rate expectations. After the inflation figures a couple of months ago - that had gone up as high as the 70 per cent chance of another hike. Prior to today's inflation figures - that had fallen to a 23 per cent chance of another hike. Right now, any hike is being priced out completely. In fact, the market is starting to focus on interest rate cuts.
Dr Domenique Meyrick, the co-CEO of Financial Counselling Australia, says there has been an increase in clients seeking their services in recent months.
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