CTU MEDIA RELEASE
25 October 2006
Lower CPI should impact on Reserve Bank
“Although monetary policy is aimed very much at constraining anticipated inflation, the lower annual CPI which emerged today shows that inflation is trending down and this should impact on the Reserve Bank,” Council of Trade Unions Economist Peter Conway said today.
“If quarterly increases remain at today’s level of 0.7 per cent then annual CPI will be back below 3 per cent within a year,” he said.
“Although the Reserve Bank will have particular issues in relation to the housing market and some inflation expectations, the CTU hopes that the official cash rate will not rise tomorrow.”
“Unions will continue to campaign for wage increases above the rate of inflation. There is no evidence that wage increases in the last year have had a significant impact on CPI compared with housing, rates, petrol and electricity,” Peter Conway said.