Herald Sun RBA watcher Terry McCrann writes today about two factors that have held inflation in check and are now abating (click the top link to jump the paywall):
1.
The first of these forces has been the war in the supermarkets between the two great elephants of Down Under retail, Coles and Woolworths. A year ago they were actually cutting prices on average across the supermarkets by 2 to 4 per cent.
2.
Then the second force has kicked in – the strong Aussie dollar. The combination, along with what might be “normal” deflation in consumer electronic goods has delivered extraordinary price cuts of 60-80 per cent over recent years.
He says the RBA may switch from a dovish bias to thinking about rate rises.
