Australia's Inflation Tops Forecasts as Fuel Costs Jump

Australia's consumer prices rose more than expected in July, driven by fuel and travel costs. The Australian Bureau of Statistics reported that its monthly consumer price index (CPI) increased by 1.0% from June, exceeding forecasts of a 0.8% rise.

The annual pace of inflation slowed to 3.5%, but this was due to an outsized increase from last year dropping out of the calculation. The median forecast had expected a slowdown to 3.3%.

Core inflation, measured by the trimmed mean, rose by 0.5% in the month, the biggest increase in a year and well above forecasts for 0.3%. This has added to the risk of another interest rate hike from the Reserve Bank of Australia (RBA).

Russel Chesler, VanEck's head of investments and capital markets, said that with this inflation result, there will have to be at least one more RBA hike this year to temper inflation.