<?xml version="1.0" encoding="ISO-8859-1"?> <docID>329722</docID> <postdate>2024-09-25 11:49:07</postdate> <headline>Slight reprieve as inflation cools to 2.7 per cent</headline> <body><p><img class="size-full wp-image-329725" src="https://citynews.com.au/wp-content/uploads/2024/09/Then-Now-resized.jpg" alt="" width="900" height="627" /></p> <caption>Cartoon: Paul Dorin</caption> <p><span class="kicker-line">By <strong>Dominic Giannini </strong>and<strong> Jacob Shteyman</strong> in Canberra</span></p> <p><strong>Australians have been gifted a slight reprieve, with inflation moderating to 2.7 per cent as price pressures hurt shoppers at the checkout.</strong></p> <p>The drop in the inflation figure spanning the 12 months to August was spurred by a decrease in transport (-1.1 per cent) while housing (2.6 per cent), food and beverages (3.4 per cent) and alcohol and tobacco (6.6 per cent) brought it higher.</p> <p>Interest rate hikes have sought to take the wind off the back of the economy and slow inflation to the central bank's target range of two to three per cent.</p> <p>The consumer price index fell a day too late for the Reserve Bank after it decided to keep interest rates on hold at 4.35 per cent.</p> <p>The RBA pays most attention to underlying inflation when making rates decisions.</p> <p>The volatility of the monthly figure makes it less influential than the quarterly one, next due in October, RBA governor Michele Bullock said.</p> <p>Inflation was 3.8 per cent over the 12 months to the June 2024 quarter.</p> <p>Mortgage holders shouldn't hold their breath for a pre-Christmas rate cut, with underlying inflation too high.</p> <p>National Australia Bank senior economist Tapas Strickland predicted the headline monthly figure won't make any difference to the likelihood of the central bank cutting rates</p> <p>He expects the first cut in May, while economists at ANZ and Westpac have pencilled one in for February.</p> </body>