Fears grow for fourth rate hike after Australia sees higher-than-expected July inflation
Summary
Australia's inflation rate in July was higher than expected, with prices rising 3.5% over the year. This has increased worries that the Reserve Bank of Australia (RBA) might raise interest rates again to control inflation.Key Facts
- Consumer prices rose by 3.5% in the year to July, slightly lower than June's 3.8% but above the expected 3.3%.
- The RBA’s preferred measure of inflation, which excludes volatile prices, stayed at 3.6%, not falling as predicted.
- The RBA kept the cash rate at 4.35% on August 11 but some board members consider another hike likely this year.
- Rising costs for home building and rent contribute to inflation, with building costs up 5.7% and rents up 3.6%.
- Fuel prices increased by 7.5% in July due to the end of a fuel tax relief.
- The price of restaurant and takeaway meals rose 4.5%, influenced by higher wages and ingredient costs.
- Economists now expect the RBA may raise interest rates as soon as its next meeting in September or November.
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