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Inflation figures support case for February rate cut

The Australian Bureau of Statistics recently released its official inflation data – the Consumer Price Index – for the December 2011 quarter.  The figures showed that the Index was unchanged over the quarter, as compared with a rise of 0.6 per cent in the September quarter 2011.   

According to the ABS, the quarter saw price increases in domestic holiday travel and accommodation, rents, telecommunication equipment and services, beer and automotive fuel.   

These increases were balanced by price falls in fruit, pharmaceutical products, vegetables, audio, visual and computing equipment, international holiday travel and accommodation and motor vehicles. 

From an annual perspective, the ABS noted that the CPI rose 3.1 per cent over the year to the December quarter, as opposed to the 3.5 per cent increase in the year to the September quarter. 

This inflation data is eagerly anticipated and reported, as it is a key consideration of the Reserve Bank of Australia when it deliberates on the official cash rate. 

Such a result whereby the CPI was unchanged helps to support the case that the Reserve Bank could move to cut interest rates for the third consecutive month at its February meeting to be held next week.

I will certainly be watching for the Reserve Bank’s decision as I’m sure will many prospective home buyers and current property owners and investors

Posted by Charles Tarbey on 30/01/2012 at 4:47 PM | Categories:

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