Higher inflation could cause rate lift
The Reserve Bank of Australia may finally have some cover to consider an interest rate rise with the cost of living increasing through the March quarter on the back of higher petrol prices.
The Australian Bureau of Statistics reported last week that prices were up by 0.5 per cent.
It took the annual inflation rate to 2.1 per cent, back inside the Reserve Bank’s target band of 2-3 per cent.
The RBA’s preferred measures of underlying inflation also increased, taking their annual rates to 1.8 per cent.
The biggest driver of the lift in inflation was automotive fuels which lifted by 5.7 per cent in the quarter.
New dwelling purchase costs lifted by one per cent, there was a 1.6 per cent jump in medical and hospital service costs, while electricity prices were up by 2.5 per cent.
There were some falls in prices as well.
International travel dropped by 3.8 per cent, fruit prices eased by 6.7 per cent and furniture costs were down by 3.5 per cent.
While inflation was up nationally it was a different story in Perth where prices were flat for the three months.
Petrol prices were up by 7.7 per cent, but a 2.4 per cent drop in rents helped drag the overall inflation rate down.
Over the past 12 months, consumer prices across Perth lifted by one per cent.