As I will come back to later, addressing this should be high on our list of national priorities. In all three scenarios published in our latest update, inflation is likely to be very low. Inflation fell into negative territory in the June quarter for the first time since the early 1960s.
While grocery prices and prices of some other items rose, this was more than offset by the decline in oil prices and governments’ decisions to make child care (and some pre-school) free. We are expecting inflation to return to positive territory in the current quarter, but to average between only 1 and 1½ per cent over the next few years.