Inflation continues upward trend

Inflation in Australia rose in March, according to new figures.

The TD Securities/Melbourne Institute monthly inflation gauge rose by 0.5% in March, following a 0.1% increase in February and a 0.2% increase in January.

Contributing to the inflation rate in March were price rises for holiday travel and accommodation, alcohol, tobacco and a 3.5% leap in the price of petrol.

The rises were offset by declines in the cost of meat, seafood, housing, clothing and footwear.

TD Securities’ head of Asia-Pacific research, Annette Beacher, said the figures did not suggest the Reserve Bank of Australia (RBA) should cut the official interest rate when it meets tomorrow.

“While expectations for a near-term rate cut have been reignited, we cannot identify clear triggers for the RBA to recommend a rate cut tomorrow, as lower inflation, lingering global risks and contractionary fiscal policy are slow-burn issues, not smoking guns,” Beacher says in a statement.

“We expect the RBA to remain relaxed and comfortable as neutral monetary policy is consistent with the bank’s forecasts for trend growth and trend inflation over the medium term.”