Australia's inflation surges to 4.5 percent on oil prices, bank charges and housing costs

Wed, Jul 23 02:10 PM

CANBERRA, Australia (AP) _ Australia's annual inflation rate surged to 4.5 percent in the latest quarter fueled by rising oil prices, bank charges and housing rents, government figures revealed Wednesday. That's the highest annual rate in eight years, and an acceleration from the 4.2 percent annual rate for the quarter through March.

Inflation was 1.5 percent in the three months through June compared with the previous quarter, according to Australian Bureau of Statistics data released Wednesday, pushing the annual rate to its highest since the year 2000. Most economists had forecast a 1.3 percent rise in the June quarter for an annual pace of 4.3 percent.

Treasurer Wayne Swan told reporters that discounting the one-off effect of a consumption tax imposed on most goods and services in 2000, the new inflation rate was at a 16-year high. "Sky-high global oil prices are making our inflation problem even worse," Swan said.

Motor fuel prices rose 8.7 percent during the latest quarter, while bank charges surged 9.5 percent due partly to the global credit squeeze. Rents rose 2.2 percent during the quarter, the biggest jump since 1989.

The inflation rate is well above the 2-3 percent range that the central bank targets by manipulating interest rates. Most economists still say the Reserve Bank of Australia is unlikely to lift interest rates above the current official cash rate of 7.25 percent at its next monthly meeting on Aug.

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