Q4 inflation to fall to 0.2pc?

Softer inflation ahead

Westpac's Justin Smirk expected the monthly inflation gauge for November to come in at 2.2 per cent over the year. 

If accurate, then with two-thirds of the data in for the December quarter bedded down, Westpac sees the Q4 inflation result coming in at just 0.2 per cent.

It could even be lower, given the figures for rents and new homes look to be potentially somewhat on the high side. 

Part of the reason for quarterly inflation falling to such low levels, of course, has been down to government rebates.

As such, there will be more focus on the trimmed mean inflation figure, which Westpac forecasts to be around 0.6 per cent (which would take the equivalent annual figure down to around 3.3 per cent).

The 6-month annualised figure for trimmed mean inflation would drop to below 3 per cent in this scenario.

Source: Westpac IQ

You can read Westpac's commentary here.

CBA also see trimmed mean inflation of 0.6 per cent, with risks "skewed firmly to the downside" as new dwelling cost inflation pressures ease. 

Despite this, the official unemployment rate remains remarkably low at under 4 per cent last month.

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