Why inflation won't force the RBA's hand on rates

Despite inflation hitting the top of the Reserve Bank's target band in the June quarter, momentum is set to moderate, particularly given a soft outlook for the labour market and wage growth.

Inflation hit the top of the Reserve Bank of Australia’s target band in the June quarter but that is no cause for concern. The outlook for inflation remains benign, underpinned by soft wage growth, and the exchange rate is no longer putting upward pressure on prices.

On a seasonally-adjusted basis, consumer prices rose by 0.6 per cent in the March quarter, with core measures exceeding market expectations, to be 3.0 per cent higher over the year. 

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