Australia Inflation Surges as Fuel Prices Jump
Australia's inflation rate rose more than expected in July, fueling concerns that interest rates may increase again. The country's consumer price index (CPI) rose by 1.0% in July from June, exceeding forecasts of a 0.8% rise.
Fuel prices jumped 7.5% after falling for three months, contributing to the higher inflation rate. Core inflation also exceeded forecasts, increasing by 0.5% in the month and leaving the annual pace at 3.6%.
The Reserve Bank of Australia (RBA) had held interest rates steady at 4.35% this month after three rate hikes this year aimed at taming inflation. Policymakers have warned that they would hike again if inflation risks build.
Market participants nudged up the chance of a fourth rate hike from the RBA next month to 36% from 17%, while a move by February next year is now priced at 94%. Deutsche Bank is calling for a quarter-point rate hike from the RBA in September, citing fresh upside risks to inflation.