- Australian consumer price inflation reached a 21-year high in the most recent quarter and is expected to continue to rise as food and energy prices soar, fueling concern that interest rates will need to more than double to contain the outbreak.
- Just one day before updating the Budget estimates from the previous administration, Treasurer Jim Chalmers releases a sombre report in which he predicts that inflation would worsen before improving.
- According to data released by the Australian Bureau of Statistics on Wednesday, the consumer price index (CPI) increased by 1.8% in the June quarter, falling just shy of market expectations of 1.9%.
Australian consumer price inflation reached a 21-year high in the most recent quarter and is expected to continue to rise as food and energy prices soar, fueling concern that interest rates will need to more than double to contain the outbreak.
Just one day before updating the Budget estimates from the previous administration, Treasurer Jim Chalmers releases a sombre report in which he predicts that inflation would worsen before improving.
According to data released by the Australian Bureau of Statistics on Wednesday, the consumer price index (CPI) increased by 1.8% in the June quarter, falling just shy of market expectations of 1.9%. The annual rate increased from 5.1 percent to 6.1 percent, which is the highest level since 2001 and faster than wage growth.
Trimmed mean, a closely monitored indicator of core inflation, increased by 1.5 percent in the third quarter, pushing the annual rate to 4.9 percent, the most since the series’ inception in 2003.
That increased the gap between core inflation and the Reserve Bank of Australia’s (RBA) target range of 2-3 percent and solidified predictions that it would increase the 1.35 percent cash rate by 50 basis points at a policy meeting on August 2.
Although the U.S. Federal Reserve is anticipated to raise interest rates by a comparable level later on Wednesday, the markets are leaning against an RBA move of 75 basis points.
The quick rise in inflation caught many central banks off guard, including the RBA, which has already had to hike rates three times—the most ruthless tightening in decades.
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