I posted on Friday to expect the Australian Bureau of Statistics CPI reweighting today

The ABS have announced the changes (will first be applied to the Q4 data, not due until January though).

In brief:

  • This is the first update of the weights in six years
  • CPI inflation in Q3 2017 would have been around 0.25% lower (in y/y terms) with the new weights
  • ABS estimates that 'substitution bias' has led published CPI inflation to have been overstated, on average, by 0.2% pa over a six-year period
  • The Reserve Bank of Australia knows of the reweighting, so it won't be a surprise
  • Nevertheless, it should see forecasts lowered a touch (SoMP is due Friday, previews here and here)