Inflation data shows rate cuts long overdue: ACTU

Media Release - January 29, 2025

Today’s inflation figures offer a green light for the Reserve Bank of Australia to reduce the cash rate at their meeting in February.

Headline inflation continues to drop rapidly to 2.4 per cent, down from 2.8 per cent last quarter, and well within the RBA’s target band.

Core inflation has also dropped rapidly, coming in at 3.2 per cent, below the RBA’s forecast of 3.4 per cent and down from 3.5 per cent in September 2024.

It was only 0.5 per cent for the quarter, also below the RBA’s expectations.  

Today’s better than expected consumer price index result means there is a clear runway for the RBA to start the cycle of rates easing from next month.

Quotes attributable to ACTU Secretary, Sally McManus:

“After 13 rate hikes, today’s inflation result should mark the end of the RBA’s stalling on rates.

“The Reserve Bank Board has got more than what it needs to deliver an official interest rate cut next month. Inflation is coming down even faster than it forecast.

“Any further RBA hold out will only add to the pressure on working families. Mortgage holders and renters need the RBA to clear the way for significant interest rates relief.

“Waiting until the entire economy grinds to a halt won’t cut it among workers who are hurting financially.

“Central banks in other developed countries started cutting rates months ago and Australia is lagging.

“A softening local jobs market and low private sector investment should also drive a cut.

“The RBA has been wrong on wages. They’ve been wrong on unemployment and inflation. Any more delay in cutting rates would clearly tip the economy into negative gear. We don’t want them to be wrong again.”

The ACTU Network

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