Australian inflation above expectations
Australia’s consumer price index increased by 3.6 percent on an annual basis in April, exceeding economists’ forecast for a 3.4 percent increase.
Inflation in Australia came in faster than expected in April. This suggests price pressures remain stubbornly strong and strengthens the case for the Reserve Bank of Australia (RBA) to keep interest rates at a 12-year high next month.
Government data released on Wednesday showed the monthly consumer price gauge rose 3.6 percent from a year earlier, beating economists’ forecast of 3.4 percent. The core indicator remained at 4.1 percent.
OIS investors have modestly increased the chances of an RBA rate hike this year; They saw the probability of an increase in September as 27 percent, compared to less than 20 percent before the announcement. Interest rate cuts are off the table until mid-2025 at the earliest.
Belinda Allen, senior economist at Commonwealth Bank of Australia, emphasized that volatile food prices are an important factor and said, “You can see that the RBA continues to be cautious about the inflation risk going forward. It is also important to consider what is happening in terms of activity data at the moment. It is clear that the economy continues to slow down.” “There are signs of this,” he said.