The Reserve Bank will finally get a monthly insight into the inflation pressures facing the country from November, potentially ending delays in key interest rate decisions that could hurt the economy and lead to higher unemployment.
This masthead can reveal the Australian Bureau of Statistics will release a fully-formed monthly inflation report from November 26, bringing Australia into line with all but one OECD nation.
A fully-formed monthly inflation report will start from November, helping the Reserve Bank set interest rates.Credit: iStock
It marks the start of winding-down the quarterly inflation report that has guided the Reserve Bank since it adopted its 2-3 per cent inflation target in the early 1990s.
The difference between monthly and quarterly inflation was a substantial factor in the recent surprise decision by the Reserve’s monetary policy board to hold official interest rates steady.
May’s monthly inflation report showed annual inflation falling to 2.1 per cent. It has been within the RBA’s target band since August last year. But the March quarterly inflation report showed prices up by 2.4 per cent, with underlying inflation just slipping within the RBA’s target band.
The next monthly report is not due until July 30.
The monthly report has been based on a smaller review of prices across the economy than the quarterly report, prompting the Reserve Bank’s ongoing concerns about its reliability and the need for full monthly inflation data.
In 2018, a small lift in underlying quarterly inflation had the bank expecting it would have to lift rates. But subsequent quarterly reports, delivered months later, showed price pressures easing.
Bank governor Michele Bullock noted issues around the monthly inflation report as one of the reasons for the bank’s decision to keep interest rates unchanged at 3.85 per cent.