Asia-Pacific

Flat inflation eases rate-hike pressure in Australia

(Xinhua)
Updated: 2011-07-04 11:16

SYDNEY - Australia's consumer prices were flat in June and inflation remains within the central bank's target range, a widely-watched private measure of inflation showed on Monday.

The TD Securities-Melbourne Institute monthly inflation gauge was flat in June, after slowing to 0.2 percent in May from 0.3 percent in April.

Over the year to June, the indicator rose 2.9 percent, in line with the Reserve Bank of Australia (RBA)'s two to three percent medium-term target range.

The RBA board will again keep interest rates unchanged at its next monthly meeting on Tuesday, says TD Securities, the investment dealer arm of Toronto-Dominion Bank.

"Along with ongoing ructions in international financial markets, today's soft June month report provides fodder for the RBA board to sit tight tomorrow," TD Securities head of Asia-Pacific research Annette Beacher said.

The June gauge showed rents continued to move higher, rising 2. 8 percent over the 12 months to June, the highest annual inflation rate in two years.

Other contributors were fruit and vegetables, which rose 6.8 percent in June, holiday travel, audio visual and computing.

That was offset by a 5.3 percent fall in the price of petrol.

Beacher expected the headline consumer price index (CPI) to be 3.4 percent higher than a year ago.

She forecast underlying CPI to rise 0.6 percent, to be 2.4 percent higher than a year ago.