Higher oil prices add fuel to inflation spike | The Business

By ABC News (Australia)

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Headline inflation jumped to 4 per cent in August, from 3.5 per cent in July, driven by higher housing costs and soaring fuel prices. But underlying inflation remained at 3.6 per cent for the third month in a row. Housing was the biggest driver of inflation with electricity prices up 13.2 per cent in the year to August as some energy rebates rolled off. The cost of building new homes rose more than 5 per cent and rent increases remained elevated. Fuel also surged 13.5 per cent and was up almost 14.8 per cent in August alone, driven by higher oil prices and the unwinding of the fuel excise cut. The news comes a day after the central bank lifted interest rates for the fourth time this year, to their highest level in 15 years, to try to drag inflation down and stop high inflation becoming embedded in Australia's economy. William Buck chief economist Besa Deda said underlying inflation remains elevated above the RBA's target band "so it really validated the decision by the Reserve Ban

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