The trigger for the Bank of Australia's interest rate cut may have come sooner than expected.
National Australia Bank economist Ben Jarman said that judging from a series of indicators, Australia's inflation rate has fallen back to a level in line with the central bank's goals. But he also said that the Bank of Australia needs to be convinced that this is sustainable and has used the adjusted quarter-end average inflation rate as the best way to eliminate any noise.
The adjusted cropped average inflation rate is already close to the target level. He believes that when calculated at the six-month level converted to an annual rate, the next published data will fall within the 2%-3% range.
Jarman said this should convince the Bank of Australia that the inflation target has been met.