Inflation figures out Wednesday won’t have any impact on thinking inside the Reserve Bank on interest rates, except that cost pressures remain under control.
The September quarter consumer inflation index will be low, helped by the fall in petrol prices and fruit & vegetable prices. And that will in turn produce a dip in annual inflation.
According to the AMP’s chief economist, Dr Shane Oliver, we can expect headline inflation of 0.4% quarter on quarter and 2.2% year on year and underlying inflation of 0.5% quarter on quarter and 2.6% for the year to September.
Commsec is a bit less optimistic is tipping higher result for the CPI. It says the headline probably rose by 0.6% in the September quarter with the annual rate of inflation falling to 2.4%.
Commsec says the various underlying measures of inflation probably rose by around 0.8% in the quarter and by 2.8% over the year.
The fall in the value of the Aussie dollar won’t have much of an impact given that oil prices have fallen much faster in the same time.
In the June quarter the CPI rose by 0.5% to be 3.0% higher over the year.
The RBA’s key underlying inflation measures rose by around 0.7% in the quarter to stand 2.8% higher over the year.
Local inflation pressures muted
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And on interest rates, inflation, the value of the dollar and housing there’s a flurry of commentary from the Reserve Bank in the coming week.
There’s the release tomorrow of the minutes of the Reserve Bank’s October meeting a fortnight ago, and speeches from RBA Governor, Glenn Stevens on Thursday in Sydney; Deputy Governor, Phil Lowe tomorrow in Sydney, while the bank’s head of economics, Chris Kent is due to speak in Adelaide this morning.
In fact it will be quite a week for the RBA and the communication of its views on the economy.
If they haven’t got across their view of the state of the economy, housing and the dollar, plus the health of the markets by Friday, then investors, traders and others won’t have been listening.
It will be a rare week of concentrated ’jawboning’ from the RBA after last week’s stunning contribution from Assistant Governor, Guy Debelle who warned about the strains in global financial markets from liquidity problems – 24 hours later he was proven right with that spectacular sell off on Wednesday night, our time.
