Aust inflation to peak at 5%: RBA

Published: 2:24PM Monday August 11, 2008 Source: AAP

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The Reserve Bank of Australia (RBA) has revised upwards its inflation forecasts and now predicts headline inflation to peak at 5% due to higher petrol prices.
  
In its August statement on monetary policy, the RBA said it expected consumer price index (CPI) inflation to continue to rise over the second half of calendar 2008 before reaching 5% by the December quarter.
  
The central bank had forecast in its previous statement, in May, that CPI  inflation would print at 4.5% in the December quarter.
  
"CPI inflation is expected to be higher in the short term, at around 5% in the December quarter, reflecting the effects of higher petrol prices and the recent correction to estimates of financial services inflation, before declining thereafter," the RBA said.

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