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The consumer price index for the 12 months to April was 3.6 percent, according to the latest data from the Australian Bureau of Statistics, higher than market expectations for a fall to 3.4 percent.
It was last above 3.6 percent in November, when the CPI was 4.3 percent.
“Yearly inflation increased to 3.6% this month from 3.5% in March. Inflation has been relatively stable over the past five months, although this is the second month in a row that annual inflation has seen a slight increase,” ABS head of price statistics Michel Marquardt said.
Housing costs were one of the key drivers of the higher-than-expected figures, rising almost 5 percent over the past year, while rents jumped 7.5 percent.
Food was also a major contributor, with fruit and vegetable prices rising by their highest amount since last April.
Marquardt said that when volatile prices such as gasoline and fresh food were ignored, the CPI was stable.
“CPI inflation is often affected by items with volatile price changes such as motor fuel, fruit and vegetables and holiday travel,” she said.
“It can be useful to exclude these items from the core CPI to provide a sense of core inflation.”
“Excluding these volatile items from the monthly CPI gauge, the year-on-year rise to April was steady at 4.1 percent.
“Annual inflation excluding volatile items remains higher than for the monthly CPI.”
The Reserve Bank is due to make its next interest rate decision on June 18. While quarterly inflation data is usually given more weight, today’s monthly data is likely to fend off any chance of a rate cut.
“We don’t think we necessarily need to tighten again,” she said.
“But we can’t rule it out. If we have to, we will.
“If we really think inflation is going to be persistent and significantly above our forecasts, we will tighten again.”
The RBA had discussed raising rates at its last meeting before opting to keep them steady.
In its monetary policy statement, the RBA said it expected it to be 3.8% for the June and December quarters – higher than both last month’s quarterly data and today’s monthly data – before easing to 3.2 % in the middle of next year.
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