For that reason its importance for interest rate levels will be negligible. Economies are slowing and that means lower, not higher inflation in the wash up.
Other factors are at work and rates are going to fall, regardless of what the CPI says on a headline basis, or on the RBA's own measures.
The underlying rate will remain around 4.4% and of interest will be the impact of the slight easing in oil and fuel costs, thanks to the sharper fall in the value of the Australian dollar.
What is of more importance is gathering slump in the global and Australian economies: that's pushed inflation to the back of the queue of policy issues for the RBA and Government.
Expansion is now the order of the day, as we saw last week. Inflation is no longer the issue for the RBA to worry about.
The RBA has already indicated that it has switched focus from inflation to the downside risks to growth, so the market is likely to see the September quarter inflation data as somewhat dated. I
Tomorrow's minutes from the RBA's board meeting two weeks ago along with a speech from Governor Stevens in Sydney at lunchtime tomorrow, are likely to be more relevant in terms of expectations for future interest rate moves in Australia.
That rate cut earlier in the month was the most aggressive monetary policy easing since May 1992, when the economy was emerging from the last recession, and returned the cash rate to 6% for the first time in two years.
Market economists expect the headline consumer price index (CPI) will rise 1.1% in the September quarter for an annual pace of 4.9 per cent.
The headline CPI rose 1.5% in the June quarter, for an annual rate of 4.5% - the largest annual increase in twelve and a half years.
Economists expect the average of the RBA's own preferred measures- the weighted median and the trimmed mean - which exclude volatile prices from CPI calculations to be up 1.0% per cent in the quarter for an annual pace of 4.5%.
Underlying CPI inflation rose 1.1% in the June quarter, for an annual rate of 4.4%.
The central bank said in the after meeting statement announcing the 1% rate cut, that the CPI was "likely to show an increase of around five per cent over the four quarters to September".
"But the bank remains of the view that inflation will start to decline in 2009," the RBA said.
Economists point out that the RBA also warned that inflation would fall faster if we got an earlier and sharper than expected slump in demand and output because of what was happening in the global economy and credit markets.
That is very much on the cards.
Friday saw an interesting move by the ANZ Bank to cut its variable home loan rate by another 0.25%. The decision came out of nowhere and means the ANZ has now trimmed its rate by 1.30% since the RBA started cutting in September.
That means the ANZ has trimmed 0.05% from its extra funding costs generated by the higher cost of short term funds brought on by the credit crunch.
The NAB cut its rates by 0.20% (thereby passing on the full 1% from the RBA) while Aussie Home Loans, 33% owned by the Commonwealth, passed on an extra 0.30%, to take its cut to 1% as well.
Effective from Monday, October 27, the interest rate on ANZ's standard variable rate home loan will fall by 0.25% to 8.32%.
The NAB's rate will by 8.36% and Aussie Home Loans rate will be 7.79%.
The three say other variable rate home loans will also decrease by 0.20% to 0.30%.
