Australian Inflation Hits 4%, Fuel Costs Surge

Australia's annual headline inflation rose to 4% in August from 3.5% in July, driven by surging fuel costs and persistent housing pressures.

The Reserve Bank of Australia (RBA) had predicted a rate hike this year would bring down underlying inflation, but it has yet to budge at 3.6% year-on-year for a third consecutive month.

Rachael McCririck, ABS head of price statistics, attributed the jump in automotive fuel prices to higher world oil prices and the end of federal government's fuel excise relief measures in August.

The RBA has now lifted interest rates by 25 basis points to 4.6%, its highest level in 15 years, as policymakers try to tackle inflation above the central bank's target band.