An independent report into the costs of living has found that inflation has been largely kept under control, rising by an estimated 0.2 per cent in May, following a 0.3 per cent increase in April.

The TD Securities – Melbourne Institute Monthly Inflation Gauge found that overall, price rises in May were driven by fruit and vegetables, rents, newspapers, books and stationery. They price hikes were offset by falls in fuel, domestic holiday travel and accommodation.

According to Annette Beacher, Head of Asia-Pacific Research at TD Securities, “For the June quarter, using mid-quarter prices now available, our headline inflation measure rose by 0.7 per cent, led by a 1.1 per cent jump in non-tradable or domestic inflation, while our trimmed mean measure rose by 0.6 per cent,” Ms Beacher said.

“While these quarterly outcomes appear elevated, they actually generate low annual inflation of 2.2 per cent and 1.9 per cent respectively. While we will publish our forecasts for the official ABS June quarter CPI with our June Inflation Gauge report, the clear signal from the May Gauge is that inflation remains benign, in the bottom half of the RBA’s two to three per cent target range.”