Financial Tools
  Client Portfolio Access
  New Client Kit
  Enquiry / Seminar Registration
Hot Issues
An investor's personal trainer
SMSF trustee penalties going up
Contraventions rife among non-advised SMSF trustees
Dealing with investor uncertainty
Reserve bank gives the economy a lift
Retirement planning: the gap between intention and reality
Market Update – April 2015
Budget 2015 - some professional opinions
Australian Government - Budget 2015
What does the ATO want from you?
Making sense of the new excess contribution rules
Greying, working and contributing
Simple-yet-smart investment housekeeping
Market Update – March 2015
Customer-centred innovation underpins high satisfaction among financial advice customers
Two sides to the age profile of SMSF members
Actuaries call for end to superannuation policy tinkering
ATO urges caution on pensions
Market Update - February 2015
Aussie economy shifts gears as structural changes take hold
The catch 22 of retirement savings
Are there reasons to help the tax man do his job?
Some financial terms explained
Small business paradox
Articles archive
Quarter 1 January - March 2015
Quarter 4 October - December 2014
Quarter 3 July - September 2014
Quarter 2 April - June 2014
Quarter 1 January - March 2014
Quarter 4 October - December 2013
Quarter 3 July - September 2013
Quarter 2 April - June 2013
Quarter 1 January - March 2013
Quarter 4 October - December 2012
Quarter 3 July - September 2012
Quarter 2 April - June 2012
Quarter 1 January - March 2012
Quarter 4 October - December 2011
Quarter 3 July - September 2011
Quarter 2 April - June 2011
Quarter 1 January - March 2011
Quarter 4 October - December 2010
Quarter 3 July - September 2010
Quarter 2 April - June 2010
Quarter 1 January - March 2010
Quarter 4 October - December 2009
Quarter 3 July - September 2009
Quarter 2 April - June 2009
Quarter 1 January - March 2009
Quarter 4 October - December 2008
Quarter 3 July - September 2008
Quarter 2 April - June 2008
Quarter 1 January - March 2008
Quarter 4 October - December 2007
Quarter 3 July - September 2007
Quarter 2 April - June 2007
Quarter 1 January - March 2007
Quarter 4 October - December 2006
Quarter 3 July - September 2006
Quarter 2 April - June 2006
Quarter 1 of 2011
Uninformed and impatient
Perspective on the tragedy in Japan.
The essentials of Corporate cash flow.
Out in the cold (the self employed)
Some terminology explained.
Market Updates - February / March 2011
Improving financial literacy is an objective we should all have.
Why baby boomers face a super sprint
Don't buy yet - first calculate the stock's P/E and PEG ratio
SMSFs:  Age matters
Some more terminology explained
Market Updates  -  January / February 2011
Secure File Transfer
CPI won't stop rate rises, says Economist
Super contender
Super birthday ahead
Some terminology explained
Market Updates -   December / January 2011
CPI won't stop rate rises, says Economist
By AAP | 25.01.2011

Weaker than expected inflation figures for the December quarter may not prevent interest rate rises in 2011, as the nation adjusts to higher costs after the Queensland floods.

The consumer price index (CPI) rose by 0.4 per cent in the December quarter, for an annual headline inflation rate of 2.7 per cent, official data released on Tuesday shows.

The market forecast had been for the CPI to rise 0.7 per cent in the quarter, for an annual pace of 3.0 per cent.

Meanwhile, the interest rate sensitive underlying measure came in at 0.4 quarter on quarter and 2.3 per cent year on year, the lowest in a decade.

It was within the Reserve Bank of Australia's (RBA) two to three per cent target range, where the central bank aims to keep the inflation rate.

JP Morgan economists Ben Jarman said he doubted the underlying inflation figure would stop the central bank from raising the cash rate.

"There might be a knee-jerk reaction here that the RBA has some time (before raising the cash rate)," he said.

"But they can't wait too long."

The central bank took the cash rate higher four times in 2010, from 3.75 per cent to its current 4.75 per cent.

Mr Jarman said he expected there to be inflationary pressures stemming from the reconstruction effort in Queensland after the state was devastated by recent flooding.

"We are still coming to grips with the impact of those floods," he said.

The Australian dollar slid after Australian Bureau of Statistics released the CPI data on Tuesday morning, as expectations of a near term interest rate rise waned.

The local unit fell from its intra day high of 99.82 US cents to 99.30 cents in the minutes after the survey was released at 1130 AEDT.

Commonwealth Bank economist James McIntyre said the impacts of the high Australian dollar and competitive discounting between the retailers helped ease inflationary pressures.

"Not something the RBA would want to hang their inflation hat (on) in a fully employed economy that is facing up to not only a massive mining boom, but also looking at a massive flood reconstruction task."

Mr McIntyre said new resource and energy projects would add to inflationary pressures brought on by the floods.

"We'll have roughly about another $35 billion of projects announced or given an investment decision in Queensland," he said.

Santos Ltd and its partners has a $US16 billion ($A16.11 billion) coal seam gas project in Gladstone, while British-owned BG Group Plc has approved the $US15 billion Curtis Island LNG project, also near Gladstone.

"So not only is the Queensland economy going to have a floods reconstruction stimulus, but that activity is going to be butting up against a massive impact on the Queensland economy," he said.

"We're all aware of the stimulatory impact that is having in WA, and Queensland is going to get a double dose."

Mr McIntyre said the lower than expected December quarter CPI could see the RBA stay on hold into the September quarter of 2011.

HSBC chief economist Paul Bloxham said the CPI figures were significantly below market expectations.

"There was less inflationary impulse in the economy in late 2010 than the markets had anticipated and, indeed, than the Reserve Bank of Australia had itself anticipated," he said.

"They've managed to get some of the inflationary impulses they were concerned about out of the economy."

With low unemployment and a strong overall economic outlook, Mr Bloxham said he expected inflation to rise.

"(That) means that it's likely that the Reserve Bank will need to continue to lift interest rates."



  Financial Advisor | Financial Planner | Financial Adviser | Financial Planning | Financial Planner Sydney