INFLATION STAYS BELOW RBA'S TARGET More Sharing...

INFLATION STAYS BELOW RBA'S TARGET

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By AAP | 03.08.2015 10:30 AM
The annual rate of inflation is staying well below the Reserve Bank's two to three per cent target, weighed down by falls in utility prices.
Consumer prices were up 0.2 per cent in July, following a 0.1 rise in June, according to the TD Securities/Melbourne Institute monthly inflation gauge.
That's keeping the annual rate of inflation at 1.6 per cent to July, and has stayed below two per cent all year.
TD head of Asia Pacific research Annette Beacher said expects inflation to pick up a little pace in the coming months.
"The fall in utility prices in July was the result of a state government rebate, and is a one-off. Otherwise, we note that annual inflation rates may have found a trough," she said.
TD Securities is not expecting the RBA to cut the cash rate for the foreseeable future after the central bank made two reductions earlier in this year.
"Cautious optimism from the RBA Governor in recent weeks speaks to us that the RBA Board is likely to leave the cash rate at two per cent for quite some time," Ms Beacher said.
Underlying inflation, which strips out the effects of volatile monthly price movements, rose 0.1 per cent in July for an annual rate of 1.5 per cent.
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