CPI news good for mortgages
HOMEOWNERS feeling the pain of a succession of rapid interest rate hikes got some good news yesterday.
The release of the much anticipated CPI data came in belowexpectations and right on theReserve Bank target for underlying inflation.
“This is what you call a beautiful set of numbers,” CommSec chief economist Craig James said.
“The Reserve Bank wanted to see an underlying inflation rate of around 2.75 per cent in the June quarter and its wish has been granted.
“In fact the wishes of all homebuyers have been answered with interest rate settings are firmly on hold.”
While the CPI rose to 3.1pcin the June quarter, underlying inflation dragged that back to a three-year low. The bottom line is that interest rates are firmly on hold until at least much later in the year, Mr James said.
However, Southern Cross Uni-versity adjunct professor in economics, Lawson Savery, reckons it's an even chance the RBA may raise rates next week if it belie-ves that resource prices will continue to rise.