Inflation levels surge following war in Middle East

29 Apr Inflation levels surge following war in Middle East

The impact from the Iran war has led to a surge in inflation, in the first major piece of economic data since the conflict began:

* Headline inflation rose from 3.7 per cent to 4.6 per cent in the year to March

* It’s the highest headline inflation has been since September 2023

* Inflation for the month went up by 1.1 per cent, which was driven by an increase in transport costs, which rose by 9.2 per cent across the board

* The rise in transport was heavily driven by the spike in fuel prices, which increased by 32.8 per cent due to the Iran war

* March was the biggest monthly increase in fuel prices since the current methodology of measuring inflation was adopted in 2017

* Average unleaded prices rose by 33 per cent, while premium unleaded increased by 30 per cent and diesel went up by 41 per cent

* The preferred measure of inflation by the Reserve Bank, the quarterly trimmed mean, rose from 3.4 to 3.5 per cent

* The inflation data has increased expectations the central bank will hike interest rates at its meeting in May, which would make it the third consecutive rate rise

* March figures also revealed housing inflation rose by 6.5 per cent for the year, while electricity was up by 25.4 per cent

Andrew Brown
(Australian Associated Press)