The latest inflation figures delivered both the good news that inflation is below 3% for the first time since early 2021 and the sense that it won’t be enough to have the Reserve Bank cut rates next week.

Back in March 2021 we were still watching weekly Covid press conferences, we had begun the slow rollout of the vaccination, and it was also the last time prices were growing by less than 3%. Until now.

In the September quarter annual inflation rose just 2.8%, with the underlying trimmed mean (that removes the big falls and rises) measure growing 3.5% – the slowest since the end of 2021:

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This is good news.

There will be a lot of chin-scratching and a lot of “yes, however …” and “you also have to consider …” but let us just take a step back and realise that the Reserve Bank targets inflation of between 2% and 3% and we are now there and that unemployment is still at very decent levels of 4.1%.

That, my friends, is good.

At this point though I can feel some economists rushing to the microphone to tell us that really this doesn’t count. It’s a fake figure – it is just “measured inflation” – because one of the main reasons inflation is below 3% is the energy rebates.

And that is true.

Without the rebates electricity prices would have fallen over the past year by 2.7% instead of 15.8%.

Given electricity........

© The Guardian