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Inflation Slow Down Leaves Room For Rates Cut

24 Jul 13

The June 2013 quarter Consumer Price Index (CPI) figures show that the Reserve Bank of Australia’s (RBA) consumer price measures of inflation are within their target zone and continue to slow down.

Real Estate Institute of Australia (REIA) President, Mr Peter Bushby, says the Reserve Bank should deliver the cuts to interest rates that the economy needs.

"In the June quarter, the consumer price index rose by 0.4% and annual inflation rate is now 2.4%. These figures are well within the RBA’s target zone of 2-3% and should provide a clear message to the Board to further ease its monetary policy," Mr Bushby said.

The analytical series of trimmed mean and weighted median increased by 0.5% and 0.7% respectively for the June quarter 2013, compared to increases of 0.3% and 0.5% respectively in the March 2013 quarter.

"The annual changes for the trimmed mean and for the weighted median were 2.2% and 2.6% respectively and are identical to the changes for the twelve months to the March quarter 2013," Mr Bushby said.

The housing group increased by 0.6% for the June quarter compared to 1.2% in the March 2013 quarter - the annual rate of increase was 5.3%.

The main increases in the June quarter for the housing group were rents and gas and other household fuels which increased by 1.1% and 1.0% respectively. For the year to June 2013, the largest increases in the housing group were for electricity (17.2%) and gas and other household fuels (15.3%). Rents increased by 3.4% for the year.

"Previously, the RBA indicated that the inflation outlook could provide scope for further easing if it was needed to support demand. With inflation well under control and a subdued economy, it’s appropriate we see a further cut in interest rates when the RBA Board meets in August," Mr Bushby concluded