This last week’s inflation reading for the so-called headlinerate, that rose a higher-than-expected 1.2%, receivedsomething of a splash across the market wires and financialpress. But these numbers do bounce around a lot; this onefor example had some meaty annual rate rises in there.The “underlying” rate, a trend series, rose a more moderate0.6% in the quarter for annual growth of 2¼%, exactly wherewe’d expected it to be and right in line with RBA forecastspublished in August. While inflation wasn’t as bad as theheadline rise in the quarter suggested (even headlineinflation has risen 2¼% over the year to September), neitherwas it so low to suggest to the RBA that they should easemonetary policy further right now.
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