![]() Other signs that inflation may remain uncomfortably high for the RBA include the fact service costs rose to an annual rate of 6.1% in the January-March period, or the fastest climb since since 2001. The cost of so-called non-discretionary items increased 7.2% in the March quarter from a year earlier, retreating from the 8.4% rate of increases in the December quarter. “This quarter’s rise was notable as prices increased in all eight capital cities, whereas typically only Melbourne’s prices are reviewed in the March quarter.” “Price reviews reflecting higher wholesale gas prices led to rises in gas and other household fuels, with rises seen across all eight capital cities and the strongest rise recorded in Melbourne (22.7%),” she said. Still, “we think there is enough momentum in core and services inflation to warrant tighter policy settings, and maintain our expectation for another rate hike in May”.įor the March quarter, the biggest contributors to inflation included the 4.2% increase for medical and hospital services and a 9.7% increase for tertiary education.Įnergy prices again featured prominently in the list of most costly goods, Marquardt said, with the ongoing war in Ukraine and unplanned outages at coal-fired power stations playing their role in the increase. However, Sean Langcake from BIS Oxford Economics said the inflation was in line with the RBA’s most recent forecasts. ![]() “Instead, I still see scope for a rate cut on or before Melbourne Cup as the economy slows.” “ a good chance the RBA won’t need to raise interest rates again this year,” Bassanese said. “Although the absolute level of inflation remains markedly above the RBA target, the weaker series offers further evidence that the rate hiking cycle has likely come to an end, as alluded to in cash rate futures,” Evans said.ĭavid Bassanese from Betashares agreed that the March quarter numbers “provided reassuring evidence that inflation likely peaked late last year there were no nasty shocks”. Shares erased their losses of about 0.3% for the day to be basically flat just prior to noon.Įconomists such as Dwyfor Evans, a strategist at State Street Global Markets, said the “generally weaker tone” to inflation included the lowest underlying rate since the end of 2021. ![]() Economists, though, were more split, with some saying the central bank has at least one more rate rise arrow in its quiver.Īfter the release of the data, the Australian dollar remained steady at about US66.25c. Prior to today’s CPI release, investors viewed the prospect of a May rate rise by the RBA as just a 17% chance, with the next move to be a cut.
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