Rising fuel and rent costs have contributed to a spike in inflation in Perth, with prices up 4.2 per cent in the year to June.
Rising fuel and rent costs have contributed to a spike in inflation in Perth, with prices up 4.2 per cent in the year to June.
It was the highest inflation rate for a 12 month period in Perth since the September quarter in 2008.
The national rate of inflation was 3.8 per cent for the year, according to the consumer price index data, with Brisbane, Darwin and Canberra all having sharper rises than Perth.
Inflation was 1.9 per cent in Perth for the June quarter alone, the Australian Bureau of Statistics said, the highest of any capital city for that period.
Automotive fuel prices were up 7.3 per cent, and rents up 2.6 per cent quarter on quarter due to strong demand and low vacancy rates.
That increase in rents in June was higher than every city except Hobart.
Electricity costs were up 91.2 per cent, as the state government’s household electricity credit continued to wind down, after it led to a dramatic drop in December.
Power costs are about 10 per cent below where they had been before the bill credit.
Underlying okay
HSBC economists said headline inflation had picked up sharply in the June quarter nationally, but underlying inflation was below the central bank target at about 1.7 per cent.
Underlying inflation excludes volatile items such as fuel prices.
“Low core inflation in addition to sharply weaker growth due to the Sydney outbreak are set to keep the RBA dovish,” the bank said.
Commsec chief economist Craig James said the high inflation rate was to be expected.
“In the June quarter last year the CPI contracted by 1.9 per cent with prices down 0.3 per cent over the year,” Mr James said.
“The drop in prices was largely the result of free child care, free pre-school in some states and a slump in petrol prices.
“That context is super-important for today’s lift in the inflation rate.
“Economists often refer to this as ‘base effects’, where prices plunge due to an unforeseen economic event or shock with the annual rate of growth rebounding a year later off low levels.
“Deflation was never going to be the norm last year. And an inflation rate hovering near 4 per cent won’t become the norm this year.
“But where inflation eventually settles will be important along with wage growth and the unemployment rate.”
