While Treasurer Jim Chalmers will welcome Wednesday’s lower inflation number, the RBA won’t be fooled by the temporary and artificial effect of energy subsidies.
The lower monthly inflation print on Wednesday will be largely ignored by the Reserve Bank of Australia.
Annual headline inflation fell to 3.5 per cent in July, from 3.8 per cent in June, according to the monthly consumer price index indicator. While Treasurer Jim Chalmers welcomed the moderation in price rises and took some credit for it, the RBA won’t be fooled by the lower number.
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John Kehoe is economics editor at Parliament House, Canberra. He writes on economics, politics and business. John was Washington correspondent covering Donald Trump’s first election. He joined the Financial Review in 2008 from Treasury. Connect with John on Twitter. Email John at jkehoe@afr.com
