Inflation softer than feared
We haven't had many pleasant surprises since Budget day, but we got one today.
Headline inflation came in lower than expected at 3.8 per cent over the year.
The trimmed mean inflation figure also held at 3.6 per cent over the year, which was lower than market expectations, while the quarterly figure for trimmed mean inflation of 0.8 per cent was below the Reserve Bank's 1 per cent trajectory forecast.
Source: ABS
To two decimal places, trimmed mean inflation was 0.81 per cent in the June quarter, which was the lowest result in over a year.
The main contributor to inflation was the housing component, which rose by 6.8 per cent over the year, which was the highest level in three years.
Electricity prices were 22.4 per cent higher than a year ago as rebates ended, rents were up to a record high, and of course the price of new dwellings is now up by 47 per cent since April 2021.
Markets priced out any possibility of an interest rate hike in August on the lower than expected figures, with interest rates set to be on hold for the time being.
Overall, this was a remarkably soft inflation result given the backdrop of the Iranian conflict.
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Vale to Westpac's Bill Evans, a brilliant economist and career, of course, and also a very down to earth fellow.
A sad day, bon voyage Bill.
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