Gas prices influence January inflation rates
Gas prices and a rise in the cost of other utilities helped inflation creep higher last month, the latest Melbourne Institute Monthly Inflation Gauge shows.
It reveals there was a 0.2 per cent increase in January, following a decline of 0.5 per cent seen in December.
In the 12 months leading to January, the gauge rose by 2.2 per cent, with utilities, education and transport among the aspects of everyday life that have increased in price.
These were, however, offset by falls in the cost of furnishings, holiday travel and communications and fruit and vegetables.
Annette Beacher, head of Asia-Pacific research at TD Securities, said that the monitor correctly predicted the low-outcome for headline inflation in the quarter leading to December.
"It is also encouraging that the underlying measure of inflation is steady at a 2.2 per cent, so both are in the bottom half of the RBA's [Reserve Bank of Australia's] two to three per cent inflation target band."
This follows the RBA's announcement on February 7 that the cash rate is to remain at 4.25 per cent, despite calls for a reduction to be made.
The bank said that it would keep an eye on economic data over the coming month ahead of its next decision.
Posted by Callum Fleming