Australia Inflation Hits 4% Despite RBA Rate Rising to 15-Year High

SYDNEY: Australia’s inflation rate accelerated to 4% in August, underscoring the Reserve Bank’s challenge as it tries to cool prices with interest rates already at their highest level in 15 years.

Fuel costs jump sharply

Australian Bureau of Statistics data showed consumer prices rose 0.4% in August from July. Fuel costs jumped 14.8%, while electricity prices were 13.2% higher than a year earlier.

The RBA recently raised its cash rate to 4.6%, taking total tightening this year to one percentage point.

Mortgage holders face pressure

Higher rates are intended to restrain demand and inflation, but they also increase mortgage repayments and borrowing costs. Markets are closely watching the next inflation data for clues about whether another rate increase will be needed.

Follow Australian economy news at NewsNationOnline. Source: Reuters.

Imran Siddiqui

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