Inflation

 The monthly inflation rate was released yesterday. See HERE for an explanation.

There are calls for a rise is rates.

Hold on There are a few things to concentrate on.

The CPI for tradables is falling the problem is non-tradables.

The base effects was the reason the annual rate rose. The monthly rate actually fell just not as much as last year!

GNE is only rising at 1% and it is slowing. 

This could be an outlier. My old ( well not as old as me!) Glenn Stevens got not one but two outliers in terms of quarterly CPIs.

I could be wrong and to be honest thus far I have been we need to wait for the economy to affect the CPI. It is afterall a lagging indicator.

Oh the last two budgets ( well this one ends this month) were slightly contractionary. The government as I have said before are in a bind. The previous government did diddly squat on fiscal consolidation. If you go too hard when rates are rising then you guarantee a recession.