The Australian Bureau of Statistics measure of consumer prices for May showed a rise in annual headline inflation from 3.6 % back to 4%.
The most significant contributors to the annual rise to May were Housing (+5.2%), Food and non-alcoholic beverages (+3.3%), Transport (+4.9%), and Alcohol and tobacco (+6.7%).
A higher-than-expected inflation number raises the risk that the Reserve Bank will be forced to hike interest rates again to get consumer prices under control.
Electricity prices also rose by 6.5% in the 12 months to May, up from 4.2% in April.
It’s important to note that the inflation data released for May is a monthly reading, and the RBA prefers the quarterly reading.
Nonetheless, businesses must stay educated when the June quarter inflation data is released in late July, before the RBA’s next rates decision is announced on August 6.
