CPI stays low

CPI stays low
CPI stays low

Australia’s headline inflation rate softened to just 0.1 per cent for the March quarter pushing the annual rate down in seasonally adjusted terms to 1.3 percent from 1.8 percent.

Today’s inflation figures for the Q1 showed a bleak picture, with both the headline and core figures missing economist expectations.

With the CPI coming in at zero, the Aussie dollar plunged. The Aussie dollar fell over half a cent against the greenback in quick response.

Interest rate cuts are now surely on the table at the next RBA meeting, economists suggest.

Columnist Pete Wargent described it as an "epic miss."

"The incompetence, ineptitude and policy failure of the RBA is now there for all to see," tweeted Stephen Koukoulas.

"An interest rate cut on 7 May - based on a weak economy - will be hugely interesting during the election campaign," he added.

The core figures matched expectations, keeping the annualized inflation rates below the Reserve Bank of Australia’s (RBA) 2-3 percent target range.

The Commsec economist Craig James noted: "Inflation is clearly not an issue."

"The published rate of inflation didn’t budge in the first three months of the year.

"Strip out volatile items and ‘underlying’ prices advanced around 0.2 per cent.

"In annual terms, annual inflation stands at a 2½-year low.

"Arguably the annual rate of ‘underlying’ inflation is the lowest on record at 1.4 per cent," James said.

James said the door "remains ajar to a rate cut."

"That is, should a rate cut be needed.

"The unemployment rate remains near decade lows – indeed the NSW trend jobless rate is at record lows."

Mortgages Cpi

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