Headline inflation grows to 4%, raising the spectre of another RBA rate hike

A key measure of inflation has jumped, climbing to 4% in May after edging up from a recent low of 3.4% in February.

The Bureau of Statistics’ monthly consumer price indicator produced an annual inflation rate of 3.6% in April. This was the same as the longer-established Bureau of Statistics quarterly measure, which produced 3.6% in March.

The upward turn suggests the Reserve Bank will have to revisit the case for an interest rate hike when it meets next in early August.

At that meeting, it will also have before it the monthly and the quarterly figures for June, which will be released in late July.

The most significant contributors to the annual increase were housing, food and non-alcoholic beverages, transport, and alcohol and tobacco.