Inflation read sours back-to-back rate cuts
Hopes of back-to-back rate cuts slid on Wednesday after inflation data came in higher than the previous month, despite April usually being a month for price hikes.
The Australian Bureau of Statistics' April inflation print shows the all-important trimmed mean inflation, which the Reserve Bank uses to measure Australia's inflation rate, came in hotter than expected.
CPI excluding volatile items and holiday travel measure rose 2.8 per cent in the 12 months to April, compared to a 2.6 per cent rise in the 12 months to March.
Australia's overall CPI indicator – including volatile items - came in at 2.4 per cent, but again was higher than market forecasts of 2.3 per cent year-on-year.
The largest contributor was food and non-alcoholic beverages, housing and recreation and culture, during the busy Easter and Anzac Day weekends.
NAB senior economist Taylor Nugent says travel is expected to be a key support in April as it is usually a seasonally strong month for the category, and the month includes Easter and ANZAC long weekends.
Elsewhere, health insurance premium increases are measured in April and were a little higher than a year ago, while fuel prices fell in the month, and there may be some additional unwind of Queensland electricity subsidies, according to Mr Nugent.
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