Yesterday's higher-than-expected inflation figures have prompted a flurry of pleas from the housing industry to leave rates untouched.
Official CPI figures released yesterday by the ABS show both weighted median and trimmed mean inflation - the measures favoured by the RBA - have risen 2.7% for the year. The CPI rose 3.6%, while most analysts had tipped only a 3.4% rise.
The result will put further pressure on the Reserve Bank to lift rates when it meets next week. However, housing industry bodies have issued calls for the RBA to stay its hand, pointing to weakness in many sectors of the economy.
"When today's CPI outcome is considered alongside the weakness in the non-resource sectors of the domestic economy and the considerable volatility in the global economy, the only sensible call by the RBA is rates on hold for the remainder of 2011," HIA senior economist Andrew Harvey said.
Harvey argued that tumbling consumer confidence and a weak housing market would be further hamstrung by any rate hikes. Loan Market COO Dean Rushton agreed, and said CPI figures were distorted by one-off impacts due to this year's natural disasters.
"Within the current CPI figures, there are some clear one-off impacts, such as the price of fruit which has risen almost 30% due to the natural disasters that occurred earlier this year," he commented.
However, economists had expected the impacts of these events to dissipate by the June quarter. Rismark managing director Christopher Joye, writing for The Business Spectator, claimed the impact of the natural disasters should have been stripped out of inflationary figures. Joye has called for at least two more cash rate rises.