Despite inflation falling to 2.1%, the expert economists who’ve got our inflation and rate cut calls wrong for too long are now telling us to forget a cut in February! While I’m another economist who has been fooled by our unusual economy, the biggest mistake maker has to be the Reserve Bank board.

You see, the RBA would be happy that the headline inflation rate came in at 2.1% in the month of October but the trimmed mean inflation rate (or underlying inflation) rose from 3.2% to 3.5%.

This measure takes out one-off or temporary ups and downs of prices. It’s a more reliable number. The fact it rose is bad news for rate cuts. The next meeting is December 10. The RBA board has a holiday in January and then convenes to make a rates call again on February 18.

This is bad news for those praying for a rate cut. To put it brutally, if they’re assessed on what they want to achieve, it says the RBA is the biggest nincompoop. To be fair, plenty of Aussies without debt could argue that inflation is still low at 2.1% and happily unemployment at 4.1% is a ripper of a result.

In case you didn’t know, the RBA has a dual role to secure price stability or low inflation while aiming to keep unemployment low. However, the current RBA has prioritised getting underlying or core inflation into 2-3% band using 13 interest rate rises.

On that criteria, this inflation result says the RBA has failed. With hindsight, they should have raised rates higher or hit us harder with more half-a-percent rises. The economies that are cutting rates now saw their central banks raise their equivalent cash rates over 5%, while Governor Michele Bullock and her board stopped at 4.35%, where we are now.

But be clear on this: if the RBA wasn’t such a loser who can’t beat core inflation like other central banks, there would be a lot more Aussies out of work at Christmas time.

Here are the key facts from yesterday’s CPI:

1. Annual headline inflation was down to 2.1%.
2. This was helped by electricity prices dropping 35.6%, thanks to government rebates and 11.5% lower fuel prices. But these don’t get counted in the underlying inflation number that the RBA looks at. This was up from 3.2% in September to 3.5% in October.
3. On the bad side, rents were up 6.7% over the year and these have a big hit on inflation.
4. Food and non-alcoholic beverages prices were up 3.3%.
5. Recreation and culture prices rose 4.3% and alcohol and tobacco prices spiked 6% over the year.

The news gets even worse, with economists inexplicably saying the first cut might have to wait until May! They seem to be ruling out a cut on April Fool’s Day on April 1, for those who refuse to acknowledge this terrible joke played on people born on this day!

Why are they saying May? Well, that’s because we don’t see the more reliable quarterly CPI until April 30, which then could help deliver an overdue rate cut.

The only way a rate cut would come earlier would be if economic growth went negative on the December 4 release and unemployment surprisingly started to spike.

Personally, I’m giving up on predicting when rates will fall. And I won’t give any airtime to the predications of other economists because their form guide reads as “hopeless”. To be fair, the same rating has to be used for doing the form on the RBA.

We won’t see rate cuts until our economy and a lot of people in it are under a lot more hip-pocket pressure. I say this ahead of Black Friday when many of us will spend too much. And then there’s Christmas! Of course, Black Friday will help lower headline inflation, but it will be ignored in the underlying inflation numbers.