RBA unlikely to advance interest rate moves after lower than expected inflation figures
Australia's inflation, a key metric in the RBA's future interest rate calls, rose 0.6 per cent over the March quarter, according to data released by the ABS.
The consumer price index (CPI) came in materially lower than what was forecasted across markets and broadly in line with the RBA's below market expectation.
Westpac was forecasting a one per cent lift in the CPI, with AMP Capital forecasting a 0.9 per cent rise.
The RBA say they will not increase the cash rate until actual inflation is sustainably within the two to three per cent range.
For this to occur, wages growth will have to be materially higher than it is currently, which will require significant gains in employment and a return to a tight labour market, the RBA noted at its April board meeting.
The latest results will unlikely change the RBA's thinking that rates won't move until 2024 at the earliest.
CPI was 1.1 per cent up annually, compared to the forecasted 1.4 per cent.
New dwelling prices declined 0.1 per cent over the quarter, namely due to the impact of the Federal Government's HomeBuilder grant and similar grants by Western Australian and Tasmania state governments.
"Without the offset from these grants, the price of new dwelling would have risen, reflecting increases in materials and labour prices in response to strong demand", head of prices statistics at the ABS Michelle Marquardt said.
