Australia's inflation rate rose for the second straight quarter in the period ending June. Matching expectations, the figure at 0.5% rose greater than the 0.1% bounce in consumer prices seen in the first three months of the year. Such upward pressure may lead the Reserve Bank of Australia to reconsider the statement it made when it held its overnight rate at 3.0% during its July 7 meeting. The statement accompanying the rate announcement made a bold point of noting that "the outlook for inflation allows some scope for further easing of monetary policy, if needed." The release of yesterday's minutes, however, may have painted a different image. In the release, the RBA stated that "recent information on the domestic economy suggested that economic activity was not as weak as had been expected." With a second quarterly rise in consumer prices, the RBA may have to call an audible and deviate from the original statement. That is, they may have to completely abandon any thoughts of further rate reductions.
