CBA: Utilities The Key Uncertainty In CPI

CBA expect “headline CPI lifted by 1.7%/qtr and 7.7%/yr. Such an outcome would mean that the headline rate of inflation decelerated over the quarter (base effects push the annual rate higher).”

• “Our forecast bakes in a large rise in utilities prices, which started occurring in Q322 but the full impact on the CPI has been delayed owing to various state government rebates. This is also a key source of uncertainty for our overall CPI forecast.”
• “We forecast goods inflation decelerated, with price dynamics reflecting both lower goods demand and improved supply. Partly offsetting this is an expected lift in services inflation, in line with the increase in wages growth we’ve seen occur over Q422 in our internal data.”