Australian mortgage-holders have \u201cdodged a bullet\u2019, with the Reserve Bank now less likely to hike rates next month after new data showed inflation unexpectedly eased to 3.8%, in the year to June, from 4%.<\/p>\n
The hotly anticipated consumer price report from the Australian Bureau of Statistics had been seen by some economists as a \u201cmake-or-break\u201d moment ahead of the RBA\u2019s upcoming rate decision on 11 August.<\/p>\n
Crucially, the ABS data showed underlying price pressures \u2013 while still too high \u2013 eased by more than anticipated through the June quarter. The RBA\u2019s preferred measure that trims out the most volatile prices came in at softer than anticipated 0.8% through the three months.<\/p>\n
That lifted the annual pace to 3.6%, from 3.5%, but was below the RBA\u2019s last forecast of 3.8%.<\/p>\n
Chris Richardson, an independent economist, declared: \u201cbullet now officially dodged\u201d.<\/p>\n
\u201cThere\u2019s been growing evidence the RBA\u2019s rate hikes were starting to work in the fight against inflation, and that the Middle East war hadn\u2019t been as bad for inflation (or the economy) as earlier feared,\u201d Richardson said.<\/p>\n
That said, the \u201cfight against inflation hasn\u2019t been won yet\u201d.<\/p>\n
\u201cBut, for now, it looks as if the RBA won\u2019t be raising rates on 11 August.\u201d<\/p>\n
For everyday Australians, falling fuel prices helped lower the headline rate of inflation in the month of June \u2013 a trend that will reverse in July following the restart of the Iran war.<\/p>\n
Rachael McCririck, ABS head of prices statistics, said \u201clower world oil prices as a result of some stabilisation in the Middle East in June contributed to fuel prices falling 10.9% in the month\u201d of June.<\/p>\n
But there was plenty of evidence of price pressures. Homebuilding costs, for example, are climbing at the fastest pace in three years, at 5.8%.<\/p>\n
\u201cThis was driven by builders passing on higher material and labour costs,\u201d McCririck said.<\/p>\n
Stephen Smith, a partner at Deloitte Access Economics, said \u201chouseholds and businesses will breathe a collective sigh of relief\u201d following the softer than anticipated inflation report.<\/p>\n
\u201cThat may be enough to keep the Reserve Bank on the sidelines next month,\u201d Smith said, although \u201cthe detail in today\u2019s numbers reveals some red flags\u201d.<\/p>\n
\u201cPrice pressures in the service economy that are not necessarily linked to the Middle East conflict picked up, suggesting that home-grown inflationary pressures are yet to be tamed.\u201d<\/p>\n
More details soon \u2026<\/p>\n","protected":false},"excerpt":{"rendered":"Australian mortgage-holders have \u201cdodged a bullet\u2019, with the Reserve Bank now less likely to hike rates next month…\n","protected":false},"author":2,"featured_media":548919,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-548918","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/548918","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=548918"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/548918\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/548919"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=548918"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=548918"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=548918"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}