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ISCOVER
Staff Reporter
The rapid rise in inflation will not force the Reserve Bank to lift the official cash rate, economists have claimed.
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Data from the Australian Bureau of Statistics found the March 2011 quarter Consumer Price Index (CPI) for the housing group increased 1.3 per cent, while the other groups increased 1.6 per cent.
The rise in the CPI Index is the highest on record since the June quarter of 2006.
But despite this, REIA president David Airey and HSBC chief economist Paul Bloxham said the RBA would not decide to push rates up sooner rather than later.
“The Reserve Bank of Australia consumer prices measures of weighted median and trimmed median are 2.2 per cent and 2.3 per cent respectively for the year – well within their target zone of 2-3 per cent,” Mr Airey said.
“Despite the March quarter CPI being the highest since the June quarter 2006, inflation is under control, with a slow-down in the annual rate of increase on the two RBA measures over the last year.”
“The March figures include increases of 16 per cent for vegetables and 14.5 per cent for fruit, which are to be expected as one-off occurrences, following this year’s flooding and cyclones in Queensland and Victoria.”
Mr Bloxham said the message for the RBA is clear, rates do not need to be increased next week.
