Inflation has eased once again in Australia, according to new data released just days out from the RBA’s next interest rates decision.
The monthly consumer price index (CPI) figures from the Australian Bureau of Statistics showed headline inflation slowed to 2.4 per cent over the 12 months to February, still well within the Reserve Bank’s target band and down from 2.5 per cent the month before.
Two measures of core inflation also dropped slightly, with CPI excluding volatile items and holiday travel down from 2.9 to 2.7 per cent, and the trimmed mean – the RBA’s preferred measure of underlying measure – also down to 2.7 per cent.
The headline figure of 2.4 per cent is the lowest monthly inflation has been since October, while the trimmed mean is at its equal-lowest point since late 2021, having also touched 2.7 per cent in December before a slight rise to 2.8 per cent in January.
The data comes less than a week before the Reserve Bank’s next interest rates decision, to be handed down on April 1 – the first to be made under its new dual-board structure.
However, the monthly figures are seen as less important than quarterly data, which isn’t due to be released until late April.
Prior to today’s inflation numbers, economists had been extremely sceptical of a rate cut next week, with the market pricing in a 92 per cent chance the cash rate will remain on hold at 4.10 per cent.
The ABS said the main factors driving price increases last month were housing (up 1.8 per cent), food and drink (up 3.1 per cent) and alcohol and tobacco (up 6.7 per cent).
Meanwhile, energy prices continued to fall on the back of government rebates.
”Electricity prices fell 13.2 per cent in the 12 months to February, compared to an 11.5 per cent annual fall to January,” ABS head of prices statistics Michelle Marquardt said.
“Excluding all Commonwealth and state government rebates, electricity prices would have fallen 1.2 per cent in the 12 months to February.”
The federal government yesterday included $1.8 billion in federal budget funding to extend its rebates until the end of the year.
