Inflation is flat-lining as falling oil prices offset the sliding Australian dollar, casting doubt over inflation forecasts.
The closely-watched gauge by TD Securities and the Melbourne Institute rose by just 0.1 per cent in November, taking the annual rate of inflation back from 2.3 to 2.2 per cent. A 4.3 per cent pick up in the cost of fruit and vegetables led the price rises, followed by stationery and clothing.
However, offsetting these was a big 5.2 per cent drop in automotive fuel, with the data capturing most of last week’s plunge. TD Securities’ head of research Annette Beacher expects falling oil prices to help keep a lid on inflation going forward.