THE best inflation figures in three years are likely to have saved borrowers from an interest rate rise.
The Australian reports the key measure of core inflation tracked by the Reserve Bank dropped to just 2.7 per cent for the year to June.
This indicates inflation is at its lowest level since mid-2007.
The unexpectedly good result takes the wind out of the Coalition's campaign line that the government's spending is pushing up the cost of living, and delivers a boost to the government's claims for economic management, with markets now expecting the Reserve Bank to keep rates steady for as long as 12 months.
It also spares Julia Gillard a pre-election rate rise.Wayne Swan concealed his relief at the inflation figures yesterday, declaring that the government understood that "many Australians still face financial pressures".
However, the Treasurer acknowledged that it was "very encouraging to see the trend with underlying inflation, and, as you know, this is the measure the Reserve Bank pays particular attention to".
Read more on The Australian.
