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 The TD Securities-Melbourne Institute's monthly measure of consumer
prices edged up 0.2 percent in July, following a flat outcome in
June. That was a subdued result given July usually sees seasonal
increases in many government charges, from rates to utilities.
As a result the annual pace of inflation slowed to 2.6 percent, from
3.0 percent in June, taking it back toward the middle of the Reserve
Bank of Australia's (RBA) long term target band of 2-3 percent.
The RBA holds its July policy meeting on Tuesday and is considered
certain to leave interest rates at 2.5 percent, where they have been
since it last cut in August 2013.
"Ongoing caution from RBA in recent weeks speak to us that the Board
can pause for another month and assess the improving global economic
outlook as well as more mixed data news closer to home," said
Annette Beacher, TD's head of Asia-Pacific research.
Monday's survey showed seasonal price rises for electricity, gas and
other household fuels, property rates and charges. These were partly
offset by falls in water and sewerage, clothing and footwear, and
alcohol and tobacco.
Various measures of underlying inflation also moderated in July.
Annual growth in the trimmed mean fell back to 2.6 percent, from 3.0
percent, while inflation excluding fuel, fruit and vegetables slowed
sharply to 1.9 percent.
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Prices for tradable goods and services fell by 0.2 percent in the
month to drag the annual pace down to 2.3 percent. Even the non-tradables
sector, where inflation has been stubbornly high, saw some
improvement with prices up 2.8 percent for the year compared with
3.3 percent in June.
The slowdown suggested that a high reading recorded for the RBA's
trimmed mean measure of inflation in the second quarter might have
been an aberration and not the start of a trend.
(Reporting by Wayne Cole; Editing by Shri Navaratnam)
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