Inflation / NAB problem loans on increase

INFLATION
Yesterday Australia's inflation figures came out with the lowest annual rate in 10-years at 1.5%. The quarterly rate was as expected at 0.5%. While the year on year rate was lower that the RBA target we would have to see a few more low quarters before the RBA considered lowering the cash rate to avoid a 'tightening' in real rates (the difference between nominal rates and inflation).

NAB
Figures released yesterday by NAB as part of their capital raising show that problem loans are on the increase. As I mentioned about a week ago there are usually two waves in a recession with the first being large high profile corporates suffering followed by mid-sized corporations.