Inflation exceeded expectations and rose 3.6 percent in the 12 months to April.
The monthly consumer price index rose slightly from 3.5 percent year-on-year through March, the Australian Bureau of Statistics said.
Economists expected the monthly price gauge, which can be volatile and not as comprehensive as the quarterly gauge, to moderate slightly to 3.4 percent in April.
The monthly consumer price index grew at a faster annual rate in April than in the previous month, and food, rent and insurance prices continue to cause headaches. (Pictured is a Sydney Woolworths shopper)
Households have been financially drained by the high cost of living and the series of interest rates that followed to control price pressures.
The Reserve Bank of Australia remains alert to inflation risks as it works to return consumer price growth to its target range of two per cent and three per cent.
The central bank’s forecasts indicate that inflation will take until the end of 2025 to fall within the target range.
ABS head of price statistics Michelle Marquardt said inflation had remained relatively stable over the past five months.
“Although this is the second consecutive month that annual inflation has seen a small increase,” he said Wednesday.
The main contributors to the annual increase were housing (4.9 percent), food and non-alcoholic beverages (3.8 percent), alcohol and tobacco (6.5 percent), and transportation (4.2 percent). percent).
The result is likely to stoke fears that the RBA will need to make another rate hike, something Governor Michele Bullock has not ruled out.
“We don’t think we necessarily have to tighten up again, but we can’t rule it out,” he told reporters in Sydney earlier this month.
‘If necessary, we will do it. If we really think that inflation is going to be persistent and significantly higher than our forecasts, we will adjust it again.
“We have always felt that it was too early to declare victory and I think the numbers of the last few weeks have shown us that.”
Bullock also confirmed that a rate hike had been seriously considered during the two-day RBA board meeting.
“Yes, that was one of the things the board discussed,” he said.
“So the board discussed the option of raising interest rates.”
The cash rate is already at a 12-year high of 4.35 per cent and borrowers are paying 68 per cent more a month compared to two years ago, after 13 interest rate increases in 18 months.
“The increase in interest rates necessary to reduce inflation has been painful for many people,” he said.
‘Inflation is bad for everyone and we have to get the job done.
“The road is likely to continue to have bumps and we should all be prepared for that.”