SYDNEY, AUSTRALIA – DECEMBER 06: Pedestrians and shoppers move along George Street on December 06, 2024 in Sydney, Australia. <\/p>\n
Lisa Maree Williams | Getty Images News | Getty Images<\/p>\n
Australia’s inflation rate<\/a> soared to 4.09% in the first quarter from a year earlier, marking its highest level in more than two years.<\/p>\n The reading was lower\u00a0than the 4.2% expected by economists polled by Reuters, but it still raised the prospects of an interest rate hike by the Reserve Bank of Australia. <\/p>\n Prices increased 1.4% from the previous quarter. In March, inflation climbed to 4.6%, driven mainly by higher costs for housing, transport and food.<\/p>\n The 4.6% reading was the highest since Australia began publishing monthly consumer price index data in 2025.<\/p>\n The data also comes ahead of the Reserve Bank of Australia’s policy meeting next week. The central bank raised rates to 4.1%<\/a> at its March meeting, the highest level since April 2025. <\/p>\n “Developments in the Middle East remain highly uncertain, but under a wide range of possible scenarios could add to global and domestic inflation,” the RBA said after its March meeting<\/a>.<\/p>\n The board said it expects inflation to remain above its 2%\u20133% target for some time.<\/p>\n RBA Governor Michelle Bullock said board members agreed that rates may need to rise further, though they differed on timing.<\/p>\n Minutes from the meeting showed policymakers viewed inflation as still “too high” and said a near-term increase may be needed<\/a>.<\/p>\n “The rise in oil prices had further increased the risk that inflation would remain above target for a prolonged period,” the minutes said. <\/p>\n Australia’s economy grew 2.6% from a year earlier in the fourth quarter, its fastest pace in two years, beating expectations.<\/p>\n