Australia looking at ‘another two years’ before inflation reaches target band

Australia faces a hefty two-year battle to get inflation properly under control, but this may take too long for the Reserve Bank of Australia as it mulls rate rises. This is the concerning analysis from a leading economist ahead of crucial data that will determine whether interest rates are hiked again this year. Trimmed mean inflation – the middle 70 per cent of price changes – remains outside the RBA’s 2-3 per cent target band at 3.6 per cent. AMP’s deputy chief economist Diana Mousina said the nation and the central bank were in for a long battle to get inflation back down to the middle of this target band. “We're not going to get inflation at 2.5 per cent for another two years and I think for the RBA, that's probably just a little bit too far away,” Ms Mousina told Sky News Business Editor Ross Greenwood. “We haven't really been able to meet our inflation goals besides a few months where that was happening last year.”