22 July 2015

Inflation is expected to have remained in check despite a sharp rise in petrol prices, encouraging the Reserve Bank to leave interest rates on hold.

The consumer price index (CPI), to be released on Wednesday, is forecast to have risen 0.8 per cent in the three months to June for an annual rate of 1.7 per cent, an AAP survey of 12 economists shows.

That would be below the RBA’s target inflation range between two and three per cent.

The figures are expected to reflect big rises in petrol prices and the impact of a lower Australian dollar.

The June quarter inflation follows a rise of just 0.2 per cent in the March quarter, for an annual rate of 1.3 per cent, the weakest result in almost three years.

The median forecast for underlying inflation, which excludes volatile price movements such as petrol, is 0.55 per cent in the June quarter and 2.2 per cent over the year to June.

Extracted in full from Sky News.