Australia inflation reaches 3.1 per cent

SYDNEY: Australia’s inflation rate was a less than expected 0.6 per cent in the quarter to June, data has showed, lowering the chances of an unpopular interest rate rise ahead of next month’s elections.The rise in consumer prices pushed headline inflation to 3.1 per cent for the year to June, the Australian Bureau of Statistics said.

But the increases were modest compared with expectations, as economists said the numbers would ease pressure on the Reserve Bank of Australia (RBA) to lift interest rates from 4.5 per cent in a meeting early next month.

“They provide plenty of scope for the Reserve Bank to leave rates on hold,” AMP Capital Investors chief economist Shane Oliver said.

Oliver said the consumer price increases were influenced by a recent increase in the government excise on cigarettes. He said while the headline inflation figure was 3.1 per cent, the underlying measure excluding certain more volatile factors, was within the RBA’s target of two to three per cent; reaching 2.7 per cent for the year to June.

“Basically it’s a pretty benign number and means that the Reserve Bank can sit back and wait until it gets more information on how the global economy is going and how the Australian economy is performing,” Oliver said. — AFP