Australia’s inflation level has surged – adding to fears of more interest rate pain for borrowers.
The monthly indicator reading showing the consumer price index soaring by 4 per cent in the year to May – up from 3.6 per cent in April.
Headline inflation is now further above the Reserve Bank’s 2 to 3 per cent target and at a new six-month high.
The bad news has been delivered only a week after RBA Governor Michele Bullock confirmed a rate rise was more likely than a rate cut, with the cash rate this month left on hold at a 12-year high of 4.35 per cent.
‘Yes, the board did discuss the case for increasing interest rates at this meeting,’ she told reporters.
‘No, the case for a cut was not considered.’
The monthly measure of inflation is now back at the highest level since November 2023, when the Reserve Bank last raised interest rates.
Australia’s inflation level has surged – adding to fears of more interest rate pain for borrowers
The Australian Bureau of Statistics data, released on Wednesday, showed petrol prices climbing by 9.3 per cent over the year, ahead of insurance and financial services on 7.8 per cent.
But tobacco had the biggest increase of 13.4 per cent.
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