A flat CPI (excluding volatile items) result is not the news Australian small businesses were hoping to hear today. The fight against inflation is still far from over, with the last stubborn categories – housing, fuel, electricity, health, education and financial and insurance services – proving difficult to get under pricing control. Record high population growth is likely a contributing factor here, and the hope from here is that moderating incoming overseas migration helps reduce price increases on these essential services.

Despite this flat monthly inflation result, it is still unlikely that the RBA will find cause to increase the cash rate, given that price rises for traceable and discretionary goods have moderated dramatically from their peaks.

What it does mean, however, is that the cash rate will be stuck at this peak level until the RBA gets a good indication that services inflation is falling. Given population growth impacts are still to be worked through, this is unlikely to happen until early 2025.