Inflation in Australia slows more than expected as interest rates bite
Inflation in Australia has recorded the smallest annual jump since April last year, placing the expectation of a near-inevitable interest rate hike in doubt.
New data from the Australian Bureau of Statistics (ABS) showed the consumer price index rose 5.6 per cent in the 12 months to May after a yearly rise of 6.8 per cent in April.
Financial markets were largely expecting an increase of around 6.1 per cent, with today's lower-than-expected result now adding pressure to what many expect to be another interest rate hike by the RBA on Tuesday.
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Spending has slowed as multiple interest rate hikes flow through to inflation. Janie Barrett
Michelle Marquardt, ABS head of prices statistics, said prices were still rising but the overall pace of inflation is declining.
"This month's annual increase of 5.6 per cent is the smallest increase since April last year," Marquardt said.
"While prices have kept rising for most goods and services, many increases were smaller than we have seen in recent months."
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