Fears of another interest rate hike have been partly allayed with the latest inflation figures coming in as expected by economists.
The annual rate of headline inflation increased to 3.8 per cent, up from 3.6 per cent, marking the first increase in the consumer price index in 18 months, the Australian Bureau of Statistics said.
But a higher June quarter number was expected by the Reserve Bank of Australia and economists, with the headline figure in line with forecasts.
How Australia's inflation rate has changed
"What we have seen today is confirmation that inflation and inflationary expectations are not running rampant," he said.
The factors still driving inflation, such as rents — pushed higher by housing shortages — and fruit prices altered by bad weather, were not fixed by higher interest rates, Mr Smith said.
Australia's interest rates are lower than some places, but inflation is higher.
"Those with a mortgage can breathe a sigh of relief, at least for now, though Australia retains a sticky inflation problem and interest rate increases at some stage this year can still not yet be confidently ruled out," he said.
