Here’s what economists are saying about Australia’s inflation report July 2018

• Australia’s June quarter consumer price inflation (CPI) report came in slightly weaker-than-expected.
• Financial market movements indicate there’s now less chance of a RBA rate hike arriving in the foreseeable future.
• Economists have expressed a similar view, although they don’t believe it has any near-term implications for monetary policy settings.

Shane Oliver, AMP Capital

The June quarter inflation data confirms yet again that, while we may have seen the bottom in inflation for this cycle in 2016, price growth is only running around the bottom end of the RBA’s 2-3% target band and there are no signs of any near-term significant price pressures in Australia, particularly with subdued wages growth and competition and technological innovation remaining intense.

We remain of the view that the RBA won’t raise interest rates until 2020 at the earliest and, given the weakness in inflation, wages and the Sydney and Melbourne housing markets, along with the uncertain outlook for consumer spending, the next move being a rate cut cannot be ruled out.