Australia's Inflation Rate Eases Ahead of RBA Interest Rate Decision
Australia's inflation rate has eased slightly, and as a result, the chances of an interest rate hike in August have decreased to almost zero.
The Reserve Bank of Australia (RBA) had been warning that inflation was still too high, but the latest figures show that the consumer price index (CPI) rose 3.8% in the year to June, down from 4.0% in May.
The RBA's preferred measure of underlying inflation, the trimmed mean, remained steady at 3.6%. The largest contributors to annual inflation were housing, food and non-alcoholic beverages, and transport, while services inflation remained persistent, particularly in housing-related categories such as rents.
However, global energy markets have been shifting dramatically in recent weeks, with oil prices surging back above US$100 a barrel. Higher oil prices do far more than increase the cost of filling up the car; they raise transport, freight and production costs throughout the economy.