Australia's monthly consumer price index has remained steady for January, but a slight rise to core inflation has dealt a blow to hopes of a second interest rate cut in the first half of the year.In the latest figures released this morning by the Australian Bureau of Statistics (ABS), inflation stayed at 2.5 per cent for the 12 months to January, bettering market expectations of a marginal increase to 2.6 per cent.But a key measure of core inflation, the trimmed mean, recorded a surprise rise to 2.8 per cent – still within the RBA's target range but higher than the 2.6 per cent economists had expected.
Core inflation has recorded a surprise – albeit slight – increase. (Anna Kucera)Food (up 3.3 per cent), housing (up 2.1 per cent) and alcohol and tobacco (up 6.4 per cent) were the main drivers of price increases, particularly fresh fruit, which the ABS found costs 12.3 per cent more than this time last year.On the other hand, electricity prices are down 11.5 per cent over the last year, and the cost of fuel has fallen by 1.9 per cent.The release of the monthly data – considered less important than the ABS's quarterly figures – comes a week after the Reserve Bank cut interest rates but warned there was still work to do to bring inflation sustainably back to target.Before the release of today's data, the market had been pricing in a 19 per cent chance of a cut when the RBA board meets next inMore to come.