Inflation, final rates forecasts and lending data: the week ahead in macro
It's a big one this week with the much anticipated quarterly inflation data to be released.
With only about a week to go until the Reserve Bank of Australia meets to decide what to do with interest rates, the upcoming quarterly inflation data will be the major focus for the week ahead. And it will undoubtedly prompt economists and banks to rejig their predictions on what the central bank will decide.
Here’s what you need to know about the key economic data releases this week.
New numbers
The data: June quarter consumer price index, Australian Bureau of Statistics
When: Wednesday, 31 July 2024
What to expect: The nations biggest banks have all published their expectations for the headline inflation figures, as well as the underlying rate, which is the RBA's preferred measure and the one most critical at this point. Commonwealth Bank economists are expecting a 1% rise in headline CPI in the three months to June and a 3.7% year-on-year rise. Their forecasts are slightly different for the trimmed mean, prediting a 0.9% quarterly lift and a 3.9% annual rise. If this is the case, they think it “could be enough” to justify another rate rise.
Westpac’s Justin Smirk also doesn’t think the data will be enough to “close the door on a rate cut”. The bank recently reconfirmed its forecast of 1% over the quarter and 3.8% over the year on a headline basis, and 0.9% for the quarter and 4% for the year for the trimmed mean. We could be in for a quick improvement though. The bank’s chief economist Luci Ellis (a former RBA assistant governor who is well acquainted with how the central bank weighs up all these different datapoints) thinks Australia has no reason not to follow the global disinflation trajectory overall.
