Australians waiting for interest rates to cut hit again as inflation picks up again
The Consumer Price Index (CPI) rose in the second quarter of 2024, pushing inflation to 3.8 percent, up from the March quarter figure of 3.6 percent.
ABS data showed inflation was above the RBA's target of between 2 and 3 per cent, which the ABS hopes to achieve by the end of 2025.
The CPI data released on Wednesday showed clothing and footwear (up 3 per cent), alcohol and tobacco (up 1.5 per cent) and housing prices rose 1.1 per cent, the most significant gains in the economy.
The central bank's board meets next Monday and Tuesday, and the central bank has repeatedly indicated that it is willing to raise interest rates for the 14th time since May 2022 if needed to tame inflation.
Treasury Secretary Jim Chalmers warned of an “unsurprising” increase earlier on Wednesday.
“I think most economists expect the current inflation numbers to be persistent, persistent and stubborn in an undesirable but not surprising way,” he told Sky News.
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Following the Reserve Bank of Australia's board meeting in June, Governor Michelle Bullock said the central bank was “vigilant” to watch for evidence that inflation was not falling fast enough.
When the committee meets next week, it may decide whether it needs to raise interest rates to ensure inflation is brought down.
The cash rate has remained at 4.35 percent since its last hike in November.
The rate has not been this high since December 2011.
The monthly CPI rose 4 percent in the 12 months to May, driven mainly by price increases in the housing, food and non-alcoholic beverages, transportation and alcoholic beverages and tobacco categories.
While the monthly figure is more volatile than the quarterly figure, the increase “will be a cause for concern for the RBA,” Stephen Walters, chief economist at the Business Council of Australia, said at the time.
There will be more to come.
