Australia’s inflation has fallen more sharply than economists expected, offering some relief to cash-strapped mortgage holders, though uncertainty remains over future interest rate movements.
The headline annual inflation rate eased to 3.4 per cent for the 12 months to November, down from 3.8 per cent. The trimmed mean inflation rate, closely watched by the Reserve Bank of Australia (RBA), also declined slightly to 3.2 per cent from 3.3 per cent.
Despite the easing figures, Judo Bank Chief Economic Adviser Warren Hogan warned that inflation pressures remain broad-based, arguing that interest rates may still need to rise. He noted that less than a quarter of the consumer price index basket is within the RBA’s target range and said the improving economy could warrant a rate hike as early as February, depending on upcoming quarterly data.
However, VanEck Deputy Head of Investments and Capital Markets Jamie Hannah offered a more optimistic outlook, suggesting the latest inflation data could be enough to delay further rate increases and spare mortgage holders additional pressure in the short term.
Even with the decline, both inflation measures remain above the RBA’s 2–3 per cent target band, making a rate cut at the central bank’s next meeting on February 3 unlikely.
