The monthly CPI figures released today by the Bureau of Statistics revealed than in the 12 months to February prices grew 6.8% – the lowest rise since June last year.

The figures show that inflation largely peaked in July-September last year, and the jump in December only reflected abnormal increases in travel (which rose 26% in one month) due to the holiday period and fruit and vegetables driven by weather events.

It is just more evidence that the Reserve Bank should pause its campaign of rate rises when the board meets next week. After 10 consecutive rates rises any heat that was in the economy is clearly cooling and the figures reflects that Australia is now following the United States which saw inflation growth fall to 6% in February – the lowest in that economy since September 2021.

With a large proportion of the 10 rate rises still to flow through into the economy and causing further slowing of economic growth and likely increases in unemployment, the RBA needs to stop its rush to raise rates. Now is the time to pause and observe the impacts.

The urgency to raise rates has clearly passed and given the tendency observed in the past of central banks hitting the brakes too hard to slow inflation and sending the economy into deep recessions it is incumbent on the RBA to be as mindful of the danger of rising unemployment as it currently has been of rising inflation.

For now unemployment remains steady at 3.5% and the RBA should adopt a wait and see approach now, rather than keep hitting the economy for no purpose.