Inflation expected to be tame yet again

 

Reserve Bank governor Philip Lowe and his central bank board are convinced the next move in interest rates will be up.

But Tuesday's March quarter inflation figures are likely to confirm such a move will be a long time coming.

Economists expect the consumer price index to grow by 0.5 per cent in the quarter, keeping the annual rate at 1.9 per cent and just below the central bank's two to three per cent target band.

Higher petrol prices and seasonal increases in education and health costs in the quarter are expected to be offset by a fall in food prices.

The more interest-rate sensitive measures of underlying inflation - which smooth out volatile price swings - are also expected to be running at an average rate of 1.9 per cent.

The official cash rate has been stuck at a record low 1.5 per cent since August 2016 and could well remain there well into 2019.

With inflation still below target, little momentum in wage growth and the unemployment rate still around half a per cent above what is considered to be "full employment" at five per cent, there is no strong case for a near-term adjustment of monetary policy, economists say.

The weekly ANZ-Roy Morgan consumer price index is also released on Tuesday.