Consumers and homeowners will be hoping the latest inflation figures spell good news when it lands on Wednesday morning.
Inflation remains well above the Reserve Bank of Australia’s target and Wednesday’s result is expected be a deciding factor when the board considers whether to raise the cash rate next week.
Inflation peaked in the December quarter at 7.8 per cent and eased to 7 per cent in the March quarter.
Economists have tipped another softening in the June figures, but it remains to be seen if it will be enough for the RBA to call it quits on its aggressive tightening cycle.
A dip in core or underlying inflation — which strips out volatile items like fruit, vegetables and petrol and is the measure the central bank watches most closely — would be welcomed by the board.
Last month, the central bank flirted with the idea of raising interest rates but ultimately kept the rate on hold at 4.10 per cent – arguing the full effect of the tightening cycle had yet to be felt.
A stronger than expected jobs result last week defied expectations to keep the unemployment rate at near 50-year low of 3.5 per cent, adding to pressure for a rate hike when the board meets for outgoing boss Philip Lowe’s penultimate meeting as governor.
Dr Lowe has repeatedly said the board will do whatever it takes to bring inflation down.
His replacement, incoming Michele Bullock, has previously said the jobless rate would need to rise to about 4.5 per cent to curb inflation.
Since May 2022, the RBA has lifted the cash rate from a record low 0.1 per cent in a bid to tackle soaring inflation.
The RBA is not forecasting a return to the target band of 2 and 3 per cent until mid-2025.
More to come.