Australian home borrowers could soon be eligible for interest rate cuts as inflation plummets.
Headline inflation, known as the consumer price index, fell to 2.8 percent in the year to September, down sharply from 3.8 percent in the June quarter.
The quarterly figure is good news because inflation is now within the Reserve Bank’s target of 2 to 3 percent.
This makes a rate cut in 2024 a viable option, despite RBA Governor Michele Bullock repeatedly ruling out any relief before Christmas.
Overall inflation fell due to cheaper electricity and petrol prices.
Underlying inflation or the trimmed average, which on average ignores volatile price movements, was higher at 3.5 percent, but represented a big drop from 4 percent in the June quarter.
The federal government’s $300 electricity rebates led to energy prices falling 24.1 percent annually in September.
Former Queensland Labor Premier Steven Miles lost Saturday’s election after introducing a one-off $1,000 electricity rebate.
Australian home borrowers could be eligible for interest rate cuts if inflation falls
According to this less comprehensive monthly data from the Australian Bureau of Statistics, headline inflation grew by just 2.1 percent over the year, which is at the low end of the RBA target of 2 to 3 percent.
The underlying CPI measure showed prices rose by just 2.7 percent when volatile items such as fruit and vegetables, petrol and leisure travel were excluded.
Food was very mixed: fruit and vegetable prices rose by 9.1 percent over the year, but dairy prices fell by 0.2 percent, as did meat, while seafood prices fell by only 0.9 percent. percent increased.
Tobacco saw the largest increase of 12.9 percent as a result of the excise indexation in September.
But rents rose by 6.6 percent – or more than triple the monthly nominal rate – in a clear sign of high immigration prolonging the vacancy crisis.
Inflation in the services sector is also still a problem: quarterly figures show a 6.2 percent increase for insurance and financial services and a 6.4 percent increase for school costs.
Health care costs rose 4.8 per cent, but transport costs fell 0.9 per cent, after the former Queensland Labor government introduced 50 cent transport rates.
Headline inflation, also known as the consumer price index, fell to 2.8 percent in the year to September, down sharply from 3.8 percent in the June quarter
