Wednesday, 22 April 2009

Coming back to the comfort zone

At least inflation is behaving as economic theory suggests it should in the face of a slowing economy in which unemployment is rising and interest rates falling. The Australian Bureau of Statistics figures this morning have put the published headline rate for the year at 2.5 per cent. While the adjusted CPI measures that the Reserve Bank uses as its guide at 4.4% (the weighted mean) and 3.9% (the trimmed mean) are still above the upper target of 3%, both are lower than they were in the December quarter. That leaves the way open for the Bank to again reduce official interest rates.

Post a Comment