Australian inflation has accelerated to a 32-year high

The consumer price index in Australia, which grew by 7.3%, reached the highest value since 1990. Over the past quarter, core inflation increased by 6.1%, also the highest since 2003.

The result contributed to an increase in the forecasted highs of the key rate in Australia by economists at AMP Capital Markets from 2.85% to 3.1%.

According to Diana Musina from AMP, prices are rising with fairly high acceleration dynamics, and there is a risk that growth will remain significantly higher than the Reserve Bank of Australia (RBA) forecast in the coming year. It is likely that the RBA will want to resolve this issue as soon as possible, in this regard, the chances are quite high that the rate increase will continue, she added.

The Australian Central Bank expects headline inflation to peak by the end of the year at just under 8%.

At the moment, the forecasts of financial markets and experts in the field of economics are associated with the expectation of two more rate hikes by a quarter of a percent to a value of 3.1% this year. Meanwhile, overnight-indexed swaps are expected to peak at 4.2% by July.

Higher-than-expected inflation is unlikely to be an obstacle to the end of the tightening cycle by the Reserve Bank in December, according to James McIntyre, an economist at Bloomberg Economics. He also noted that the rise in prices largely reflects temporary shocks or factors that could ease over the coming months.