John Rolfe: Why inflation rise may be good news for homeowners
Inflation has accelerated to 3.8 per cent but hundreds of thousands of homeowners and the PM will be buoyed at the news. John Rolfe explains why.
Opinion
Don't miss out on the headlines from Opinion. Followed categories will be added to My News.
A rate rise next week now appears unlikely – that’s the key takeout from these new inflation figures.
While headline consumer price index accelerated slightly to 3.8 per cent, the Reserve Bank of Australia’s preferred measure, the “trimmed mean”, slowed to 3.9 per cent over the year to the end of June.
That’s an outcome that’s probably acceptable to Michele Bullock and the RBA board.
Had the trimmed mean come in at, say, 4.1 per cent or higher, then they may well have felt compelled to tighten the screws to get the CPI to fall faster. The RBA wants it to be at 3 per cent by the second half of next year.
There are many economists who believe the next set of inflation data from the Australian Bureau of Statistics will show a big fall, partly because a large increase in the third quarter of 2023 will drop out of the mix.
If that proves correct, then there won’t be any more interest rate rises – a huge relief for mortgagors, who’ve endured 13 rate rises since May 2022.
A reduction may even be not too far away. Some economists are pointing to a downward shift in November, after the next CPI figures. Money markets also moved to support this view on Wednesday.
Anthony Albanese may be rethinking how to time the next election to take advantage of an RBA rate cut (or cuts), given the cost of living is the number one issue for many if not most voters.
Originally published as John Rolfe: Why inflation rise may be good news for homeowners
I went cold turkey on my phone and it was pretty cool
Caleb Bond spent 24 hours freed from the shackles of his smart phone and lived to tell the tale.
US election’s dumbest economic idea a risk for Australia
Kevin Rudd blasted the US for throwing its allies under a bus on the economy. But Tom Minear argues Kamala Harris and Donald Trump are doing it anyway.