SHOCK INFLATION SPIKE AS COST OF LIVING SOARS
- Inflation rose by 3.5 per cent in year to March - up from 3.4 per cent in February
- Petrol prices surged by 8.1 per cent over the year as Israel fights hostile attacks
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Australians may have to wait for an interest rate cut with inflation climbing again - putting it further above the Reserve Bank's target as petrol prices soar.
In March, the consumer price index rose to 3.5 per cent, up from 3.4 per cent in February.
This meant headline inflation was further above the RBA's 2 to 3 per cent target.
Petrol rises surged by 8.1 per cent over the year as Israel's war with Hamas and now Iran pushed up crude oil prices, leading to premium unleaded selling for more than $2.20 a litre across Sydney.
Food is also dearer with bread and cereal prices rising by 7.3 per cent, as finance and insurance costs rose 8.2 per cent.
The quarterly measure of headline inflation, however, showed some moderation with the CPI rising by 3.6 per cent - down from 4.1 per cent in December.
But an underlying measure of inflation, known as the weighted median, showed alarming price increases of 4.4 per cent, based on the goods and services with prices rising at the middle level.
The Australian Bureau of Statistics calculates price increases based on analysing a basket of goods.
The Reserve Bank of Australia isn't expecting inflation to return inside its 2 to 3 per cent band until the end of 2025.
That means a slower moderation in inflation could delay potential rate cuts, with the RBA cash rate now at a 12-year high of 4.35 per cent following 13 increases in 18 months in 2022 and 2023.