Rate Rise Fears Ease On Modest PPI Gain
Article courtesy of SMH BusinessDay. Sources by Chris Zappone, AAP, Reuters. 26 July 2010.
Australia’s producer price index at the final stage of production rose 0.3 per cent in the June quarter, less than economists had predicted, as the costs of vehicles and meat fell.
“There were less price pressures in production than we expected, which could help limit inflation through the second half of the year,” said Brian Redican, a senior economist at Macquarie. “The RBA should be pleased with this.”
Even so, today’s numbers may increase the likelihood that the RBA will leave rates on hold at next week’s board meeting. Economists had been tipping that producer prices would rise 0.8 per cent for the June quarter.
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