n home borrowers may have to wait for an interest rate cut with inflation climbing again – putting it further above the Reserve Bank’s target as petrol prices soar.
In March, the consumer price index rose to 3.5 per cent, up from 3.4 per cent in February.
This meant headline inflation, based on the monthly measure of annual price rises, was further above the RBA’s 2 to 3 per cent target.
The Westpac bank is now forecasting a delay in rate cuts.
Petrol rises surged by 8.1 per cent over the year as Israel’s war with terrorist group Hamas and now Iran pushed up crude oil prices, leading to premium unleaded selling for more than $2.20 a litre across Sydney.
![ns may have to wait for an interest rate cut with inflation climbing again - putting it further above the Reserve Bank's target as petrol prices soar (pictured is a shopper in Sydney's eastern suburbs)](https://i.dailymail.co.uk/1s/2024/04/24/02/84012873-13343171-image-a-40_1713922771902.jpg)
ns may have to wait for an interest rate cut with inflation climbing again – putting it further above the Reserve Bank’s target as petrol prices soar (pictured is a shopper in Sydney’s eastern suburbs)
![Petrol rises surged by 8.1 per cent over the year as Israel 's war with Hamas and now Iran pushed up crude oil prices, leading to premium unleaded selling for more than $2.20 a litre across Sydney (pictured)](https://i.dailymail.co.uk/1s/2024/04/24/02/84013655-13343171-image-a-53_1713923823137.jpg)
Petrol rises surged by 8.1 per cent over the year as Israel ‘s war with Hamas and now Iran pushed up crude oil prices, leading to premium unleaded selling for more than $2.20 a litre across Sydney (pictured)
Food is also dearer with bread and cereal prices rising by 7.3 per cent, as finance and insurance costs rose 8.2 per cent.
The quarterly measure of headline inflation, however, showed some moderation with the CPI rising by 3.6 per cent – down from 4.1 per cent in December – but it was higher than market forecasts of a 3.5 per cent increase.
An underlying measure of inflation, known as the weighted median, showed alarming annual price increases of 4.4 per cent, based on the goods and services with prices rising at the middle level of the range.
The n Bureau of Statistics calculates price increases based on analysing a basket of goods.
The trimmed mean measure, taking away the biggest price increases and decreases, produced an annual inflation rate of 4 per cent – proving the fight against inflation is far from over.
Westpac chief economist Luci Ellis, a former RBA assistant governor, is now forecasting the first rate cut being delayed to November, out from September.
‘Inflation was a bit higher than expected in the March quarter,’ she said.
‘It is declining, but it has a way to go for the RBA to be confident of returning to the 2 to 3 per cent target range on the desired timetable.
‘We expect the board to keep rates on hold in May, and have pushed out the date of the first rate cut to November this year, previously September.’
Moody’s Analytics economist Harry Murphy Cruise said the RBA was now likely to delay cutting interest rates, as inflation remained higher during the start of the stage three tax cuts in July.
‘Inflation will keep easing from here, but progress will be slow,’ he said.
‘What’s more, a chunk of progress on inflation has come from temporary government rebates that will eventually unwind.
![Westpac chief economist Luci Ellis, a former RBA assistant governor, is now forecasting the first rate cut being delayed to November, from September (she is pictured left with former Reserve Bank chief Philip Lowe)](https://i.dailymail.co.uk/1s/2024/04/24/03/84015129-13343171-image-a-55_1713926978133.jpg)
Westpac chief economist Luci Ellis, a former RBA assistant governor, is now forecasting the first rate cut being delayed to November, from September (she is pictured left with former Reserve Bank chief Philip Lowe)
![Food is also dearer with bread and cereal prices rising by 7.3 per cent, as finance and insurance costs rose 8.2 per cent (pictured is a TikTok images of a Woolworths bakery)](https://i.dailymail.co.uk/1s/2024/04/24/02/84012893-13343171-image-a-54_1713923934629.jpg)
Food is also dearer with bread and cereal prices rising by 7.3 per cent, as finance and insurance costs rose 8.2 per cent (pictured is a TikTok images of a Woolworths bakery)
‘Those aren’t dealbreakers for the RBA, but they will delay rate cuts.
‘We had expected the first rate cut to come in September. Increasingly, it’s looking like we’ll have to wait until November.’
Saxo’s head of foreign exchange strategy Charu Chanana said the latest inflation figures could see rates stay higher for longer.
‘A stronger n first quarter inflation print could give more room to “higher-for-longer” positioning, with the RBA preaching patience on inflation,’ she said.
The Reserve Bank of isn’t expecting inflation to return inside its 2 to 3 per cent band until the end of 2025.
That means a slower moderation in inflation could delay potential rate cuts, with the RBA cash rate now at a 12-year high of 4.35 per cent following 13 increases in 18 months in 2022 and 2023.
But not all goods are getting dearer, with clothing and footwear prices up 0.3 per cent.