Inflation spikes to 4.0 percent

Inflation target remains elusive - Newsreel
Inflation is on the rise again. | Photo: iStock

Australia’s inflation rate once again has a 4 in front of it.

The latest Australian Bureau of Statistics (ABS) data shows the monthly Consumer Price Index (CPI) rose 4.0 percent in the 12 months to May, up from 3.6 per cent in April.

It was first time the headline inflation rate had been at 4 percent, or higher, since November last year.

ABS Head of Prices Statistic Michelle Marquardt said the most significant contributors to the annual rise to May were housing, food and non-alcoholic beverages and transport.

“CPI inflation is often impacted by items with volatile price changes like automotive fuel, fruit and vegetables, and holiday travel,” Ms Marquardt said.

“It can be helpful to exclude these items from the headline CPI to provide a view of underlying inflation, which was 4.0 per cent in May, down from 4.1 per cent in April.”

She said housing rose 5.2 percent in the 12 months to May, up from 4.9 per cent in April, while rents increased 7.4 percent for the year, reflecting a tight rental market across the country.

Annual inflation for food and non-alcoholic beverages was 3.3 percent in May, down from 3.8 per cent in April, with the largest contributor to the annual increase in food prices dining out and take away foods.

View all the data.