A private gauge of Australian inflation declined in November for the first time in five months, led by drops in the cost of vegetables and fuel.
Consumer prices slid 0.1 percent last month after rising 0.1 percent in October, an index compiled by TD Securities Inc. and the Melbourne Institute released in Sydney today showed. Prices rose 2.5 percent from a year earlier, in the middle of the central bank’s 2 percent to 3 percent target, it showed.
Investors are pricing in an 87 percent chance Reserve Bank of Australia Governor Glenn Stevens will cut the benchmark interest rate by another quarter percentage point to 3 percent at tomorrow’s policy meeting. Annette Beacher, head of Asia-Pacific research for TD Securities, is among a minority of economists who predict the central bank will stand pat.
“Better global activity data continues to trickle through, especially from the U.S. and China, while underlying inflation appears set to remain mid-target, well away from the bottom of the range,” she said in a statement. “While it is appropriate to leave an easing bias on the table, we cannot identify a smoking gun for a near-term policy adjustment.”
Today’s inflation gauge showed vegetable prices fell 11 percent in November, the fuel price dropped 4.5 percent and holiday travel and accommodation declined. Costs of bread, cereal products, newspapers, books and stationery and dairy products all increased, it showed.
The Melbourne Institute is a research unit of Melbourne University, and TD Securities is a division of Toronto-Dominion Bank, Canada’s second-largest lender. The monthly inflation index measures the prices of more than 1,000 goods and services.