INFLATION WITHIN RBA TARGET

Written on the 22 January 2014

INFLATION WITHIN RBA TARGET

 INFLATION remains within the RBA’s target band, giving the Housing Industry Association (HIA) to predict interest rates will stay at historic lows.

Consumer Price Index (CPI) figures for the December quarter released by Australian Bureau of Statistics this morning showed the price level rose by 0.8 per cent and underlying inflation by 0.9 per cent.

CPI rose 2.7 per cent in the year to December, putting it well within the Reserve Bank’s target rate of 2-3 per cent.

HIA senior economist Shane Garrett says the figures add fuel to the notion interest rates will remain at all-time lows for a considerable amount of time to come.

“There is no justification to depart from current settings while inflation is under control and while economic growth continues to be below trend,” says Garrett.

“Domestic manufacturers will be encouraged to see that import prices are coming under pressure. After several difficult years, Australian manufacturers are finally starting to see their price competitiveness receive a boost.

“It is encouraging to see the rate of housing cost a little below its medium term trend rate, however, at 4.3 per cent, day-to-day housing costs are growing much faster than the general price level. This shows that more needs to be done by policymakers in making housing more affordable.”

The most significant price rises this quarter were for domestic holiday travel and accommodation (+6.9%), fruit (+8.1%), vegetables (+7.1%), new dwelling purchase by owner-occupiers (+1.0%), international holiday travel and accommodation (+2.6%) and tobacco (+2.2%).

The ABS says holiday expenses rose due to peak season fares in travel and accommodation, while fruit and vegetable prices rose mainly due to adverse weather.

Prices for new dwelling purchase by owner–occupiers rose mainly due to rising building materials and labour costs.

The CPI rose 2.7% through the year to the December quarter 2013, following a rise of 2.2% through the year to the September quarter 2013.


Latest News

SUPER RETAIL GROUP SAYS GOODBYE TO AMART SPORTS BRAND

A BRAND synonymous with Australian sporting goods, Amart Sports, will be retired from 1 November 2017. Super R...

SUPREME COURT GRANTS LEAVE FOR CLASS ACTION AGAINST DICK SMITH

A CLASS action law suit against Dick Smith has been given the green light for shareholders impacted by the company...

NEXTDC SHARES SOLD OFF AS ONGOING SPAT WITH 360 CAPITAL CONTINUES

SHAREHOLDERS in data centre operator NextDC (ASX: NXT) have dumped their stock in the company as its ongoing war of w...

SURVEY SAYS COUNTEROFFERS MIGHT BE A WASTE OF MONEY

TO RETAIN the best and brightest employees it sometimes seems like a good idea to offer more money, but recent res...

Related News

SUPER RETAIL GROUP SAYS GOODBYE TO AMART SPORTS BRAND

A BRAND synonymous with Australian sporting goods, Amart Sports, will be retired from 1 November 2017. Super R...

SUPREME COURT GRANTS LEAVE FOR CLASS ACTION AGAINST DICK SMITH

A CLASS action law suit against Dick Smith has been given the green light for shareholders impacted by the company...

NEXTDC SHARES SOLD OFF AS ONGOING SPAT WITH 360 CAPITAL CONTINUES

SHAREHOLDERS in data centre operator NextDC (ASX: NXT) have dumped their stock in the company as its ongoing war of w...

SURVEY SAYS COUNTEROFFERS MIGHT BE A WASTE OF MONEY

TO RETAIN the best and brightest employees it sometimes seems like a good idea to offer more money, but recent res...

BOOK YOUR FUNCTION SPACE HERE

 

 

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter