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The Guardian - AU
The Guardian - AU
National
Patrick Commins Economics editor

Interest rate hikes remain on cards as Australia’s underlying inflation climbs, economists warn

The Reserve Bank of Australia is tipped to hike interest rates at least once more this year after a key inflationary marker rose during the year to May.
The Reserve Bank of Australia is tipped to hike interest rates at least once more this year after a key inflationary marker rose during the year to May. Photograph: Saeed Khan/AFP/Getty Images

Australia’s inflation challenge is far from over and more Reserve Bank rate hikes remain on the cards, economists warn, even after a plunging petrol costs drove an unexpected fall in consumer price growth in the year to May.

Annual inflation dropped to 4%, from 4.2% in the year to April, according to the Australian Bureau of Statistics, dragged down in large part thanks to a nearly 12% drop in fuel prices in the month of May.

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