Market analysts say the latest inflation numbers alone won’t bring about a rate cut when the RBA meets next Tuesday, but consumer confidence around mortgage rate increases from the big four banks will prompt closer consideration.
Australia’s inflation rate was steady at 1.5% over the year to the September quarter. The consumer price index of 1.5% has now been below the Reserve Bank’s target band of 2-3% for a year.
AMP Capital chief economist Shane Oliver said inflation is lower than expected despite a 20% fall in the value of the Australian dollar during the past year and expects a 0.25% cut to the cash rate in November to counteract mortgage interest rate increases by the big four banks.
BetaShares chief economist David Bassanese shares the same view.
JP Morgan economist Tom Kennedy expects closer consideration of a rate cut, but no move.