Inflation re-accelerated in April, raising concerns that simmering price pressures will delay any rate relief for cash-strapped households.
The monthly consumer price index rebounded to 3.6 per cent in the 12 months to April, the Australian Bureau of Statistics said on Wednesday, outpacing an expected increase of 3.4 per cent.
Amid a broader slowdown in household consumption, the hotter-than-expected inflation reading will add to concerns that price pressures and economic activity are re-accelerating.
On its own, Wednesday’s result won’t change the timing of if and when the Reserve Bank can start to lower interest rates, which affect variable mortgages and other loans.
However, the result is likely to stoke fears that the RBA may need to deliver another rate hike, which governor Michele Bullock has not ruled out.
The ABS monthly inflation indicator is more volatile than quarterly measures as it only provides a partial update of consumer price growth. Indeed, April’s figures were heavily skewed towards good, rather than more stubborn services prices.
More to come.