The Reserve Bank of Australia has said it is still too early to see what type of impact global volatility will have on Australian inflation, in the minutes for its September board meeting.
The board stated there is not yet enough data to make a decision.
“A key question for members was the extent to which recent global and domestic developments would reduce capacity pressures in the economy and, in due course, help to contain inflation,” the bank said.
“Very little hard data were available, as yet, on which to base such judgements. As further information became available on the domestic and international economies, members would continue to assess the medium-term outlook for inflation and growth.”
However, the RBA stated that the current cash rate provides it ample opportunity to respond if economic conditions change.
It also noted that the local economy was softer than expected. “Cautious behaviour by households and the high level of the exchange rate were having a noticeable dampening effect on some sectors, while the impetus from the earlier fiscal stimulus was abating, as had been intended,” it said.
“Overall, the near-term growth outlook looked somewhat weaker than had been expected earlier, but the medium-term outlook still appeared positive, providing that the world economic outlook did not continue to deteriorate.”
Metcash and Pick n Pay Retailers have been deemed free to complete the $215 million purchase of Franklins, the Federal Court ruled this morning.
The ruling comes after the Australian Competition and Consumer Commission filed an appeal on September 9 after losing the original attempt to block Metcash from buying the company.
The ACCC argues that if the deal goes ahead, it would weaken competition in the supermarket space.
The Australian sharemarket has opened lower this morning after a weak lead from the United States where investors remained pessimistic regarding the European debt crisis.
The benchmark S&P/ASX200 index was down 25 points or 0.63% to 4055.9 at 12.00 AEST, while the Australian dollar has remained flat at $US1.02c.
AMP shares rose 0.25% to $3.98, while Commonwealth Bank shares fell 0.47% to $44.74. ANZ shares rose 0.93% to $19.59, as Westpac lost 0.41% to $19.43.
In the United States, the Dow Jones Industrial Average lost 108 points or 0.94% to 11,401.01.
Telco TPG has recorded a 40% increase in full year net profit due to strong subscriber growth, with shares rising 1% to $1.49 this morning.
Profit was $78.2 million, up from $55.7 million from the previous corresponding period, while revenue was up 13% to $574.5 million.
“Strong organic subscriber growth in the group’s core consumer broadband business has continued with a net increase in the year of 59,000 subscribers,” TPG said in a statement.
“The On-Net broadband and home phone bundle has continued to be the major growth driver, adding 98,000 subscribers during the year.”
Ratings agency Standard & Poor’s has cut Italy’s sovereign credit rating, citing the country’s “weakening economic growth prospects” and doubts its parliament will be able to respond to the “challenging domestic and external macroeconomic environment.
The European nation’s credit rating is now A/A-1, down from A-1+.”We believe the reduced pace of Italy’s economic activity to date will make the Government’s revised fiscal targets difficult to achieve,” the agency said.
“Furthermore, what we view as the Italian Government’s tentative policy response to recent market pressures suggests continuing future political uncertainty about the means of addressing Italy’s economic challenges.”
The downgrade comes as Greece continues to talk with the IMF and EU about how it will service its debt load.
The Australian Taxation Office has launched a High Court appeal over tax paid by a James Hardie subsidiary, RCI.
The ATO lost the case in the Full Federal Court last month.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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