INFLATION (FINANCE) – AUSTRALIA

Inflation pain for households will linger well beyond 2026

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Original article by Simon Benson
The Australian – Page: 5 : 27-Nov-24

Analysis of the Reserve Bank’s forecasts in its statement on monetary policy for November suggests that real household income per capita will rise by 1.3 per cent in the current quarter, followed by growth of 1.2 per cent in 2025 and 1.1 per cent in 2026. However, Australians’ living standards are still set to be 4.4 per cent lower at the end of 2026 than at the time of the May 2022 federal election; this is despite the central bank factoring in a fall in the cash rate from 4.35 per cent at present to 3.5 per cent over the next two years. Shadow treasurer Angus Taylor said Australians are paying the price for Labor’s economic mismanagement, and they will continue to live with the damage of the inflation crisis well into the late 2020s.

CORPORATES
RESERVE BANK OF AUSTRALIA, LIBERAL PARTY OF AUSTRALIA

Resist your urge to splurge, ALP told

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Original article by Jack Quail
The Australian – Page: 1 & 5 : 6-Nov-24

The Reserve Bank of Australia’s decision to leave the cash rate unchanged at 4.35 per cent on Tuesday had been widely expected. The RBA remains focused primarily on underlying inflation, which governor Michele Bullock says is still too high for the central bank to consider reducing the cash rate. Underlying inflation was 3.5 per cent in the year to September, and Bullock notes that temporary electricity rebates contributed to the headline inflation rate falling to 2.8 per cent. Bullock has also emphasised the need for Treasurer Jim Chalmers to avoid any spending measures that may fuel inflation ahead of the federal election.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY

ANZ-Roy Morgan Inflation Expectations drop to 4.6% in late October – down from 4.7% for the month of September

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Original article by Roy Morgan
Market Research Update – Page: Online : 30-Oct-24

The latest weekly ANZ-Roy Morgan Inflation Expectations are 4.6% for the week of October 21-27. This figure is below the average this year of 4.9%, and down 0.1% points from the month of September. A look at monthly Inflation Expectations for September shows the measure at 4.7% for the month – down 0.3% points from a month earlier and below the average so far this year of 4.9%. Looking back over the first nine months of the year, weekly Inflation Expectations have moved in a narrow band of 4.5% to 5.3% and averaged 4.9%. The data for the Inflation Expectations series is drawn from the Roy Morgan Single Source, which has interviewed an average of around 5,200 Australians aged 14+ per month over the last decade, and includes interviews with 6,031 Australians aged 14+ in September 2024.

CORPORATES
ROY MORGAN LIMITED

IMF inflation warning: World goes low as we stay high

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Original article by Geoff Chambers, Jack Quail
The Australian – Page: 1 & 4 : 23-Oct-24

The International Monetary Fund’s latest World Economic Outlook report forecasts that Australia and Slovakia will be the only two advanced economies with headline inflation above three per cent by the end of 2025. The IMF expects Australia’s inflation rate to rise to 3.6 per cent by December 2025, as federal and state government cost-of-living relief is wound back. The IMF had previously forecast in April that Australia’s inflation rate would fall to 2.8 per cent in 2025. While some economists do not expect the Reserve Bank to begin reducing the cash rate until the second half of 2025, the IMF forecasts that other central banks will aggressively ease monetary policy. Meanwhile, the IMF now expects the Australian economy to grow by just 1.2 per cent in 2024, compared with its April forecast of 1.5 per cent growth.

CORPORATES
INTERNATIONAL MONETARY FUND, RESERVE BANK OF AUSTRALIA

Don’t expect rate cut soon: Bullock

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Original article by Michael Read
The Australian Financial Review – Page: 1 & 8 : 25-Sep-24

Reserve Bank of Australia governor Michele Bullock has ruled out an official interest rate cut in the near-term, following the central bank’s decision to leave the cash rate unchanged at 4.35 per cent on Tuesday. Bullock says the RBA remains focused on the underlying inflation rate, rather than the headline rate. Monthly data to be released on Wednesday is expected to show that headline inflation was within the RBA’s target range of 2-3 per cent in August, compared with 3.5 per cent in July. However, Bullock has emphasised that electricity rebates from the federal and state governments contributed to this fall, and headline inflation is likely to rise above the target when the rebates expire next year. Lower petrol prices also put downward pressure on headline inflation in August.

CORPORATES
RESERVE BANK OF AUSTRALIA

ANZ-Roy Morgan Inflation Expectations drop to 4.8% in mid-September – down from 5.0% for the month of August

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Original article by Roy Morgan
Market Research Update – Page: Online : 18-Sep-24

The latest weekly ANZ-Roy Morgan Inflation Expectations are 4.8% for the week of September 9-15. This figure is below the average so far this year of 5.0%, and down 0.2% points from the month of August. A look at monthly Inflation Expectations for August shows the measure at 5.0% for the month – down 0.1% points from a month earlier and in line with the average so far this year of 5.0%. Looking back over the first eight months of the year, weekly Inflation Expectations have moved in a narrow band of 4.6% to 5.3% and averaged 5.0%. The data for the Inflation Expectations series is drawn from the Roy Morgan Single Source, which has interviewed an average of around 5,200 Australians aged 14+ per month over the last decade, and includes interviews with 5,974 Australians aged 14+ in August 2024.

CORPORATES
ROY MORGAN LIMITED, AUSTRALIAN BUREAU OF STATISTICS

Inflation is smashing incomes more than interest rates are

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Original article by John Kehoe, Michael Read
The Australian Financial Review – Page: 3 : 10-Sep-24

Challenger’s chief economist Jonathan Kearns refutes claims by Treasurer Jim Chalmers that the Reserve Bank’s interest rate rises are "smashing the economy". The latest national accounts data shows that total household incomes rose by 6.2 per cent in 2023-24. Kearns contends that interest rates eroded just 1.3 percentage points of the income gains, compared with the 4.4 percentage point impact of inflation. He notes that unlike interest rates, inflation affects all households. Kearns is a former economist at the Reserve Bank.

CORPORATES
RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, CHALLENGER LIMITED – ASX CGF

ANZ-Roy Morgan Inflation Expectations drop to 4.8% in late August – down from 5.1% for the month of July

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Original article by Roy Morgan
Market Research Update – Page: Online : 28-Aug-24

The latest weekly ANZ-Roy Morgan Inflation Expectations are 4.8% for the week of August 19-25. This figure is below the average so far in 2024 of 5.0%, and down 0.3% points from the month of July. A look at monthly Inflation Expectations for July shows the measure at 5.1% for the month, up 0.2% points from a month earlier and the highest monthly figure since April (5.2%). Looking back over the first seven months of the year, weekly Inflation Expectations moved in a narrow band of 4.8% to 5.3%, and averaged 5.0%. The data for the Inflation Expectations series is drawn from the Roy Morgan Single Source, which has interviewed an average of around 5,200 Australians aged 14+ per month over the last decade, and includes interviews with 6,088 Australians aged 14+ in July 2024.

CORPORATES
ROY MORGAN LIMITED, AUSTRALIAN BUREAU OF STATISTICS

Inflation watch: mind the gap

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Original article by Jack Quail
The Australian – Page: 4 : 28-Aug-24

Economists expect official data to be released on Wednesday will show that Australia’s headline inflation rate eased to 3.4 per cent in the year to July, compared with 3.8 per cent in June. HSBC’s chief economist Paul Bloxham says the Reserve Bank’s board is likely to overlook the headline inflation figure when it meets in September, given that its preferred measure of underlying inflation is expected to be higher. Treasurer Jim Chalmers says that although inflation remains "sticky and stubborn", Labor has made a lot of progress in reducing it since taking office in May 2022. Shadow treasurer Angus Taylor contends that Labor’s cost-of-living measures will temporarily reduce the headline inflation rate.

CORPORATES
HSBC AUSTRALIA HOLDINGS PTY LTD, RESERVE BANK OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, LIBERAL PARTY OF AUSTRALIA

Coalition’s $100bn savings formula

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Original article by Simon Benson
The Australian – Page: 1 & 4 : 27-Aug-24

Shadow treasurer Angus Taylor says the Coalition will pursue a ‘back to basics’ economic agenda if it wins the next federal election. The Coalition has identified nearly $100bn worth of savings it can make by scrapping government programs and initiatives. They include the Housing Australia Future Fund, the Rewiring the Nation program and the Future Made in Australia policy. Taylor says the government’s excessive spending is driving up the longer term inflation rate, and notes this has been acknowledged by the Reserve Bank.

CORPORATES
LIBERAL PARTY OF AUSTRALIA, RESERVE BANK OF AUSTRALIA