Inflation expectations among consumers in Australia fell for the second month in a row in September, with the Melbourne Institute index falling to 3.8%, after recording 4.2% last month. This monthly indicator is monitored closely because inflation expectations tend to influence actual price growth.
The annual consumer price index fell to 1.9% in the second quarter of this year, and inflation had reached 2.1% in the first quarter of this year, the strongest reading since mid-2014. As for the growth data came in accordance with expectations in the second quarter where Consumer and government spending was supportive of the economy, with GDP growing by 1.8% year-on-year.
Over the past week, the Reserve Bank of Australia kept its monetary policy unchanged amid signs of a slowing housing market, keeping the central bank at interest rates at 1.5% since the August 2016 meeting when it cut it by 25 basis points. Also, record low wages and weak core inflation were factors that kept policymakers on the sidelines past year.