Following last week’s release of the inflation numbers for the March quarter, most economists are forecasting that the Reserve Bank won’t start cutting interest rates before the end of 2024, with some urging further cash rate increases.
Another source of inflation in the March quarter was private school fees, which typically are reset at the beginning of the school year. Those increases will fall out of the June quarter’s CPI. It is fanciful to think that persistently high interest rates would push school fees lower.
Despite the 3.6 per cent inflation rate sitting not very much above the top of the Reserve Bank’s 2-3 per cent target range, it has been interpreted by most economists as a disaster. The board warned that a rebound was anticipated in coming quarters as recent declines in fuel prices and the pace of decline of some household goods prices were not expected to persist, and electricity rebates were legislated to expire.
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