Inflation has eased further in the June quarter, rate cute likely in August

ABC NEWS (Australia)

The Reserve Bank board will be digesting CPI data released today, which shows inflation is sitting well within the central bank's target range. With the RBA's preferred figure now at its lowest rate in more than three years there are high hopes for another cut to the official cash rate when the board meets next month.

Transcript

00:00From meat costs to staples like bread, inflation is easing despite some noticeable price spikes.

00:09I use a lot of butter in my cooking and butter is wild right now.

00:13Food and drink prices went up by 3% in the year to June due to higher costs on fruit and vegetables.

00:19But the cost of new builds and rents are rising at their slowest pace in years.

00:24Insurance premium increases are also easing off, pushing services inflation back to average levels and fuel is going backwards.

00:34Overall, inflation is at 2.1% annually with the Reserve Bank's preferred trim measure at 2.7%, which is well within its target range.

00:44This is the lowest inflation in almost four years.

00:47These are very pleasing, very welcome, absolutely outstanding inflation numbers.

00:54The Reserve Bank shocked borrowers when it kept rates on hold in July.

00:58One of the few economists who tipped that decision reckons the RBA board will be happy with these latest figures.

01:05I think that's good enough to really justify an RBA rate cut at the August policy meeting.

01:10The Reserve Bank's probably going to drop interest rates.

01:13That's with news.

01:14That's fantastic.

01:15Yeah, we'd love it.

01:16The Reserve Bank has already cut interest rates twice this year.

01:21Another cut wouldn't just be good for people with mortgages.

01:24It would also help businesses that have been struggling as cash-strapped households hold back on their spending.

01:31The hospitality sector has been faring among the worst.

01:36I think it just feels like every day there's another battle.

01:39The longer that we keep rates high, the longer that we go through this period of poor growth.

01:44The RBA's board meets on August 11 with a decision on interest rates the next day.

01:50We're looking for help.

01:50.

01:54.

01:55.

01:58.

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