Australian inflation accelerates on credit, fuel costs

Wednesday 23rd July 2008

Inflation accelerated in Australia last quarter, on higher costs for fuel and credit, making it more likely the central bank will keep borrowing costs at a 12-year high.

The Consumer Price Index rose 1.5% in the June quarter from the previous three months, for an annual pace of 4.5%. The quarterly rate exceeded the median in a Bloomberg survey.

Economies globally are posting higher inflation on the back of fuel, food and raw material prices that have spiraled higher. New Zealand inflation sped to a faster-than-expected 1.6% rate in the second quarter.

In the second quarter, finance and insurance services costs rose 3.8% while transportation costs rose 3.1%, the Australian Bureau of Statistics said in its report today

The Reserve Bank of Australia's benchmark rate is 7.25%.

By Jonathan Underhill

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