ABS: CPI figures reveal headline inflation rose in year to April

Figures which the RBA will use to determine whether it will hike rates even further have been released.

Headline inflation jumped to 6.8 per cent in the 12 months to April, new figures have revealed.

This latest figure is higher than the 6.3 pre cent annual rise reported in March, but below the December high of 8.4 per cent.

The most significant contributors to the increase were housing, food, transport and recreation and culture.

Housing rose 8.9 per cent in the last year, but has fallen below the 9.5 per cent increase recorded in the year to March.

But beyond the headline figures, the underlying numbers are less concerning, with the ABS confirming when “volatile” factors like fuel, fruit and vegetables, and holiday travel are removed, inflation is actually down from 6.9 per cent in March to 6.5 per cent.

The monthly CPI indicator annual movement rose 6.8 per cent in April, up from 6.3 per cent in March.

Michelle Marquard, head of price statistics at the ABS, said it “can be helpful to exclude items with volatile price changes from headline CPI to provide a view of underlying inflation”.

The underlying trends are of the greatest concern to the Reserve Bank, who will use the figures to consider whether to pause or increase interest rates when the board meets next week.

Elsewhere, rent prices rose from an annual rise of 5.3 per cent in March to 6.1 per cent in April amid the tight rental market.

Ms Marquardt said food and alcoholic beverages prices remained high but had eased slightly from 8.1 per cent in March to 7.9 pre cent in April.