Australia inflation surges again in Q4, argues for more rate hikes

AUSTRALIAN inflation shot to a 33-year high last quarter as the cost of travel and electricity jumped, a shock result that adds to the case for the country’s central bank to raise interest rates again at a policy meeting next week.

Data from the Australian Bureau of Statistics on Wednesday showed the consumer price index (CPI) climbed 1.9 per cent in the December quarter, outpacing market forecasts of 1.6 per cent.

The annual rate climbed to 7.8 per cent, from 7.3 per cent, the highest since 1990 and more than twice the pace of wages growth. For December alone, the CPI rose 8.4 per cent compared to the same month a year ago, up from 7.3 per cent in November.

A closely watched measure of core inflation, the trimmed mean, rose 1.7 per cent in the December quarter, lifting the annual pace to 6.9 per cent and well above forecasts of 6.5 per cent. REUTERS