Australia: Price pressures building up – RBC CM

Analysts at RBC Capital Markets point out that Australia’s headline Q2 inflation was weaker than expected while core measures were broadly in line though RBC’s economists note the details were soft.

Key Quotes

“There are price pressures in a number of key areas which are largely nondiscretionary, with some reflecting government policy and regulated changes. Price increases in health, education, utilities, insurance, and housing continue to rise well above headline inflation (and are set to rise further in Q3). That is likely to temper consumption and add to a number of challenges for households. But the data are in line with the RBA’s forecasts for now suggesting little change to its medium-term forecasts in next week’s quarterly SoMP.”