Australians have been heeding calls from the Reserve Bank to reduce spending and now the inflation rate is down to a target range — so why is a rate cut still not expected this year?
While Australians have been struggling with the cost of living and cutting back on essentials under the pressure of rising interest rates, they've been hammered with one main message. For the past few years, Reserve Bank of Australia has been stressing that in order for it to cut interest rates, inflation must be within a 2 to 3 per cent range. Last week, that happened. Australia's annual inflation rate fell from 3.8 per cent to 2.
" The RBA's preferred measure of inflation is 'trimmed mean inflation' — which is the underlying inflation rate that reduces the effect of irregular or temporary price changes that can impact the consumer price index — in this case, electricity and automotive fuel. When removing those factors, alongside other large price rises and falls, trimmed mean annual inflation stood at 3.5 per cent, down from 4.
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