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Australia’s Inflation Rises at Highest Level in 7 Years

The Australian Bureau of Statistics (ABS) reported today that inflation rose at its fastest pace since 2014 in the fourth quarter of 2021 as fuel and housing prices exerted broader price pressures.

The consumer price index (CPI), a measure of inflation, rose 1.3% QoQ, and 3.5% YoY in 4Q21.

The average core inflation rate rose 1.0% in 4Q21, the fastest pace since 2008, and the full-year CPI rose to 2.6% in 2021, above expectations. The CPI was expected to reach 2.5% by 2023.

This could be the main reason why the Reserve Bank of Australia wants to raise interest rates this year.

The next monetary policy meeting will provide more information, but analysts believe the committee will vote to keep interest rates at 0.1%.

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