Inflation Trends: The flow on effects. And why you can't hold a central bank to account. What you need to know

1. Australian CPI fell from 5.4% YoY to 4.9% YoY in July, with inflation recording a bigger drop than expected.

2. This means the RBA will likely keep interest rates as they are, at 4.1% at next week's meeting.

3. It's a bit of a reprieve for mortgage holders, who got burnt when they actually listened to the RBA governor who said 'rates won't rise till 2024'.

4. Since May 2022, the RBA hiked rates 12 times ,by 4% in total, taking the cash rate from 0.1% to 4.1%.

5. The average mortgage holder in Australia, with a $586,054 loan, felt their owner-occupier variable loan rate rise from 2.86% (source: RBA, April 2022 ), to about 6.6%. Meaning, the average. Australian is paying $1,319 p/m extra in repayments. That's $15,828 p/year.

6. The futures are expecting the RBA to cut interest rates in August next year (2024- the year the RBA said it would start raising interest rates). So, expect interest rates to likely stay as they are, at 4.1%, till August 2024.

7. Despite CPI falling; there are some trends to note...

- Fruit and Vegtable prices are down 5.4% YoY

- Electricy prices are on the move, up 15.7% YoY

- Gas prices are up 13.9% YoY

- Insurance and financial services costs are up, 8.5% YoY

8. Investor considerations?

- Insurers groups are trading up:

9. Consensus suggests their shares will rise 8.24% on average over the next 12 months

The information is general in nature and has been prepared without considering your financial objectives, situation or needs. Consider the appropriateness of this information in light of your personal circumstances before making investment decisions.