May cash rate cut from Reserve Bank of Australia all but locked in as fresh inflation data points to more financial relief
A second rate cut this year is all but certain as fresh inflation data showed it was likely the Reserve Bank of Australia will deliver more financial relief for millions of Aussies.
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The Australian Bureau of Statistics revealed trimmed mean inflation – the middle 70 per cent of price changes core to the RBA's rate call – fell to 2.9 per cent as headline inflation remained at 2.4 per cent.
This drop falls in line with the RBA's preferred range of between two and three per cent and means it is highly likely to lead to a 0.25 per cent cut in May.
ABS' acting head of prices statistics Leigh Merrington said the fall in trimmed mean inflation brought it to the lowest level since 2021.
"Trimmed mean annual inflation was 2.9 per cent in the March quarter, down from 3.3 per cent in the December quarter," Ms Merrington said.
"This is the lowest annual trimmed mean inflation rate since the December 2021 quarter."
Prior to the fresh data being released on Wednesday, headline inflation was expected to come in at 2.3 per cent as trimmed mean inflation was forecast at 2.8 per cent.
Wednesday's inflation data follows the RBA's February rates call when mortgage holders around the country finally felt fresh hip pocket relief after the central bank lowered the cash rate by 25 basis points.
It followed inflation for the December quarter rising 2.4 per cent while trimmed mean inflation rose 3.3 per cent annually.
The cash rate was held at 4.35 per cent for more than a year as post-pandemic inflation slowly cooled.
That pause followed the RBA hiked rates 13 times from May 2022, over the period of about a year and a half, to stamp out soaring price pressures.
More to come.
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