http://au.ibtimes.com/articles/3254/20100705/rising-inflation-ups-rates-pressure.htm
Jul 5, 2010 15:54 AEST
Record inflation ups rates pressure
The rate of inflation soared for the eighth straight month in June, along with the prices of food, travel and insurance services while Australia moves closer to total employment.
The TD-Securities/Melbourne Institute inflation gauge edged up 0.3 per cent in June for an annual reading of 3.6 per cent, after the cost of food, travel and insurance services increased.
The annual reading is far higher than the Reserve Bank's target range for inflation of 2 to 3 per cent over the long term.
"This June update offers scant relief," said TD Securities senior strategist Annette Beacher in a statement.
"Every measure of inflation in this report, be it headline, trimmed mean or excluding volatile items, is printing well above the upper tolerance level of the RBA's 2 to 3 per cent inflation target band," she said.
"Uncomfortably high inflation should not be particularly surprising since the Australian economy is all-but fully employed, a situation that is likely to remain for quite some time."
RATE: At the latest official reading, the jobless rate was at 5.2 per cent.
Economists generally believe that when the unemployment rate stands at five per cent, the nation is considered fully employed.
Ms Beacher said the statistics would not sit well with the Reserve Bank, which could elevate the official interest rate to help regulate demand and price growth.
The rising inflation will test the Reserve Bank's patience as it heads into its monthly board meeting tomorrow to set the benchmark cash rate
Jul 5, 2010 15:54 AEST
Record inflation ups rates pressure
The rate of inflation soared for the eighth straight month in June, along with the prices of food, travel and insurance services while Australia moves closer to total employment.
The TD-Securities/Melbourne Institute inflation gauge edged up 0.3 per cent in June for an annual reading of 3.6 per cent, after the cost of food, travel and insurance services increased.
The annual reading is far higher than the Reserve Bank's target range for inflation of 2 to 3 per cent over the long term.
"This June update offers scant relief," said TD Securities senior strategist Annette Beacher in a statement.
"Every measure of inflation in this report, be it headline, trimmed mean or excluding volatile items, is printing well above the upper tolerance level of the RBA's 2 to 3 per cent inflation target band," she said.
"Uncomfortably high inflation should not be particularly surprising since the Australian economy is all-but fully employed, a situation that is likely to remain for quite some time."
RATE: At the latest official reading, the jobless rate was at 5.2 per cent.
Economists generally believe that when the unemployment rate stands at five per cent, the nation is considered fully employed.
Ms Beacher said the statistics would not sit well with the Reserve Bank, which could elevate the official interest rate to help regulate demand and price growth.
The rising inflation will test the Reserve Bank's patience as it heads into its monthly board meeting tomorrow to set the benchmark cash rate
