The Reserve Bank of Australia (RBA) had, however, thought that core inflation would peak at 6 per cent in the December quarter, with headline inflation topping at 7.75 per cent.

Inflation in Australia rose to a 32-year high in the last quarter this year, with the annual rate shooting up to 7.3 per cent from 6.1 per cent—nearly thrice the wage growth pace. The consumer price index (CPI) jumped by 1.8 per cent in the September quarter, topping market forecasts of 1.6 per cent, according to Australian Bureau of Statistics (ABS) data.

This development has now led to concerns that the country’s central bank may opt for more aggressive rate hikes.

The annual inflation for essential goods and services leaped to 8.4 per cent in the September quarter, highlighting the extent of cost-of-living pressures, ABS observed. Prices for clothing, footwear and transport, however, fell.

The last time inflation was higher was in the June quarter of 1990 when it was 7.7 per cent.

The Australian dollar rose by 0.3 per cent to $0.6412, the highest in more than two weeks.

Fibre2Fashion News Desk (DS)