Investing.com-- Australian consumer price index inflation grew more than expected in April, fueling renewed concerns that the Reserve Bank wil have to keep interest rates high to bring down price pressures.
CPI inflation grew 3.6% year-on-year in April, data from the Australian Bureau of Statistics showed on Wednesday. The reading was above expectations of 3.4%, and also picked up from the 3.5% seen in March.
The reading indicated that inflation remained buoyant after reading higher than expected for the first quarter. It also marked a second consecutive month that inflation had grown more than expected.
Excluding volatile items such as fuel, fresh food prices and holiday spending, core CPI inflation remained steady at 4.1% in April, indicating that underlying price pressures remained sticky.
Wednesday’s reading saw inflation push further above the Reserve Bank of Australia’s 2% to 3% annual target. The RBA only expects inflation to fall within its target range by end-2024, and to settle comfortably within the range by mid-2025.
Sticky inflation is expected to push the RBA into keeping interest rates high for longer. Persistently sticky inflation could also bring back concerns over more potential interest rate hikes by the RBA back into play.
Australian stocks slid after the data, with the ASX 200 benchmark losing 1%. The Australian dollar's AUDUSD pair, on the other hand, was buoyant.