Inflation accelerated to 0.5 per cent in the December quarter, beating market expectations of a 0.4 per cent rise but not enough to stop the annual rate from slipping.
The consumer price index slowed slightly to 1.8 per cent in the 12 months to December 31, from 1.9 per cent in the previous quarter, figures from the Australian Bureau of Statistics on Wednesday showed.
“Annual growth in the CPI remains below 2 per cent in the December quarter 2018,” ABS chief economist Bruce Hockman said.
“Over the past four years, annual growth in the CPI has only risen above 2 per cent in two of the past 16 quarters.”
The headline rate of 1.8 per cent for 2018 remains below the Reserve Bank’s target band of 2 to 3 per cent. That means the possibility of further cuts to official interest rates remain.
In more bad news for the RBA, core inflation – which strips out volatile items – eased to 1.7 per cent for 2018. That is its weakest reading in two years.
The most significant rise in costs was tobacco, which was up 9.4 per cent. Domestic holiday travel and accommodation prices rose 6.2 per cent, and fruit jumped 5.0 per cent.
Fuel fell 2.5 per cent on big November and December price cuts, while audio visual and computing equipment became 3.3 per cent cheaper. Wine prices decreased 1.9 per cent.
The Australian dollar jumped nearly 0.4 per cent to 71.80 US cents on the data’s release.