Australia's core inflation lifted in Q2 – ANZ

Analysts at Australia and New Zealand Banking Group (ANZ) offer their afterthoughts on the Australian second-quarter CPI release.

Key quotes

“Headline Q2 inflation lifted to a very strong 0.8%, which saw annual headline inflation surge above the RBA’s target band for the first time in a decade. This move is expected to be temporary though, and inflation will soon start to slow over the coming quarters.”

“The trimmed mean inflation also lifted, though to a more subdued 0.5% q/q. We expect trimmed mean inflation to return to the target band in H2 2022 and rise from there, triggering cash rate hikes in H2 2023. “ 

“With the annual figure some way below 2%, the underlying message is that inflation is still a long way from where the RBA wants it to be.”