Breaking: Headline inflation stable at 2.4pc while RBA’s preferred measure drops within target

Headline inflation has remained steady but the Reserve Bank’s preferred measure of consumer prices has fallen within the RBA’s target band for the first time in more than three years.

The Australian Bureau of Statistics March quarter data show headline inflation remained steady at an annual rate of 2.4 per cent, while the RBA’s preferred measure of trimmed mean inflation dropped from 3.3 to 2.9 per cent.

Economists surveyed by Reuters generally expected headline inflation to ease to 2.3 per cent for the 12 months to March, with the trimmed mean figure falling to 2.8 per cent — within the Reserve Bank’s 2-3 per cent target range.

Ahead of the data release, markets were pricing in the virtual certainty of a 0.25-percentage-point interest rate cut on May 20, with a slim chance of a larger cut at that RBA meeting.

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