Annual inflation drops to 2.1pc in June, prompting expectations of an August interest rate cut by the Reserve Bank
Annual inflation in Australia fell to 2.1% in the June quarter, down from 2.4% in March.
Both headline and underlying inflation measures showed declines, with the trimmed mean inflation decreasing to 2.7% from 2.9%.
Economists indicate this trend may lead the Reserve Bank to cut interest rates in August.
Westpac’s chief economist, Luci Ellis, stated that the data supports the likelihood of rate cuts, particularly given the recent uptick in the national unemployment rate from 4.1% to 4.3% in June.
Rate Cut Outlook
Analysts are optimistic about an impending interest rate reduction, asserting that inflation is under control.
BetaShares’ chief economist, David Bassanese, noted a broad-based easing in inflation contributed to this outlook, although caution is warranted regarding the reliability of previous inflation data from the ABS.
Slowing automotive fuel prices, which decreased 10%, were identified as a major factor in the reduced inflation rate.
