Fuel Price Surge Lifts Inflation Forecast to 0.8% Monthly Rise

Rising fuel prices are expected to drive up inflation figures in Australia, set for release on Wednesday. The headline consumer price index is forecasted to rise by 0.8 per cent for the month, according to ANZ Bank economists Madeline Dunk and Jasmine Zheng.

The annual figure is expected to ease 0.6 percentage points to 3.2 per cent due to a softer electricity print compared to 12 months prior. The trimmed mean, which shows growth in underlying prices and is watched closely by the Reserve Bank, is predicted to lift 0.3 per cent for the month.

This would cause the annual trimmed mean to edge down to 3.5 per cent. However, recent RBA communication has focused on upside risks to inflation, with governor Michele Bullock stating there would be no hesitation in raising rates again if inflation exceeds forecasts.