Stephen Koukoulas

So what we are focusing on, I think what the board will focus on too, the RBA, is the trimmed means.

So you take out all these volatile items and there's a legitimate case to take out petrol because just as quickly it's gone up the last couple of months, it could well come down.

So you don't necessarily hike because of that.

However...

The trimmed mean or the underlying inflation rate, which focuses on the core part of the inflation pressures that are driven by economic conditions, is still above the target.

It was still 3.3% and the target's 2.5%.

And...

On that particular number, that's why there's such a high probability, not a certainty, but a high probability that they do hike and announce the rate hike tomorrow afternoon.

And that's a really good point.

And it's interesting, that's why the RBA hiked in February and March, just by the way.

We don't yet have what we call the second round effects of the oil and petrol shock in the economy.

So transport, logistics costs, airfares, these sorts of things, which are obviously going to be affected.

There was just a smidge of those coming through in the March data, but we really need April, May and June data to see that pass through of just higher costs of driving a truck, flying a plane and these sorts of things, which will be passed on to the consumer.

That said, we did see inflation lifting in other parts, building construction costs.

They were up, I think, about 6.5% in annual terms.

And at a time when we want to build more buildings, this is a constraint on economic activity.

It's a bad thing.

And again, some of the...

supply chain issues are being impacted by the war in a sense.

I don't think it's had a direct effect on this monthly number for building costs, but building costs are going up.