It increasingly looks as if Australia is experiencing a sharp burst of inflation, much like what happened in the US and Europe over the past six months.

The next consumer price index report in late April should confirm further broad-based price rises across the economy. Early calculations suggest a trimmed mean result as high as 1.5 per cent in the March quarter. This will leave the annual rate fast approaching 4 per cent and take core inflation well above the Reserve Bank of Australia’s 2 per cent to 3 per cent target range.