Australia’s inflation soars to 3.6% in June

Official figures have today revealed a surge in Australia’s inflation rate as floods and cyclones, which struck earlier this year, pushed up food and fuel prices.

Prices increased by 3.6% in the three months to the end of June on an annual basis, sending the Australian dollar to a 28-year high against the US dollar.

The figures have fuelled speculation that the Reserve Bank of Australia (RBA) will start lifting interest rates again.

Earlier this month, the RBA kept interest rates on hold at 4.75% – for the seventh time since November.

Maintaining interest rates comes as the economy slows and pressures mount over inflation.

Australia was the first economy to raise rates from a 50-year low as the economic downturn eased. Other major economies opted for lower interest rates to boost their economies.

It is one of the few developed economies not to have fallen into recession like its counterparts throughout the world.

However, the economy, dubbed the “wonder from down under” has recently experienced a slowdown after flood and cyclone disasters led to a fall in coal and agricultural exports and resulted in the economy contracting in the first quarter – the largest contraction since 1991.

In the meantime, figures today showed that Australia’s retailers are suffering their worst slump in two decades.

On an annual basis, clothing, footwear and personal accessory retailing was 2.6% lower in May.

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