Australia - ABS on CPI reweighting

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

• Australia - reweighting of CPI likely to take it lower

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)