Headline CPI was flat on the month and slowed to 3.4% y/y, undershooting expectations as underlying inflation eased slightly. Despite the softer print, the November CPI is unlikely to influence the RBA’s February decision, with attention firmly on the quarterly inflation data later this month, UOB Group's economists Lee Sue Ann reports.

Softer monthly CPI unlikely to shift RBA outlook

"Headline CPI was flat m/m and slowed to 3.4% y/y, below expectations. Trimmed mean inflation also eased slightly, while seasonal CPI rose 0.2% m/m." 21

"Housing CPI rose 5.2% y/y, as electricity costs were up 19.7% y/y due to rebate rolling-off effects. Excluding rebates, electricity rates rose by a more modest 4.6%. Food and transport price inflation remained stable at around 3.3% and 2.7% respectively."

"The monthly CPI is still relatively new, and the softer Nov reading is unlikely to sway the RBA’s next meeting on 3 Feb. The quarterly inflation report on 28 Jan will matter more."