Reserve Bank interest rates: Australia’s core inflation now running at 2.8 per cent

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Reserve Bank interest rates: Australia’s core inflation now running at 2.8 per cent

Australia’s core inflation has posted a second monthly reading within the Reserve Bank’s target band at 2.8 per cent in the year to the end of January.

That was up slightly from 2.7 per cent in the 12 months to December, according to the *********** Bureau of Statistics data released on Wednesday.

The Reserve Bank will likely brush off the monthly data because it only gives a partial picture of inflation — with the bureau’s quarterly assessment deemed a better gauge.

Headline inflation — which includes the impact of subsidies such as power rebates — was steady at 2.5 per cent.

The fresh numbers come after the RBA last week slashed the official cash rate to 4.1 per cent.

It was followed by a warning from governor Michele Bullock not to expect another swift move downward.

Ms Bullock told Parliament just days later that core inflation would have likely undershot the RBA’s 2 to 3 per cent target band without that dose of rate relief.

She also said the central bank had moved too late lifting rates in 2022, and did not want to make the same mistake.

Among big banks, Westpac has also predicted inflation would slow significantly in coming months.

Markets had overnight tipped just a 19 per cent chance of a rate cut in April. But they have still pencilled in two more before 2025 is over.

About 44,000 new jobs were created in January, while the unemployment rate lifted from 4 per cent to 4.1 per cent.

Both employment and unemployment rose because more people were participating in the market. Roughly two in three working-age Aussies were either in work or looking.

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