Australia Q1 annual inflation slows less than expected, core sticky

Australian consumer price inflation slowed by less than expected in the first quarter, while the progress in the core inflation stumbled, reinforcing market bets that an interest rate cut could be a long way out.

Data from the Australian Bureau of Statistics on Wednesday showed the consumer price index (CPI) rose 1 per cent in the first quarter, above market forecasts of 0.8 per cent.

The annual pace of CPI inflation, however, slowed to 3.6 per cent from 4.1 per cent, but again came in above forecasts for an easing to 3.5 per cent. For March alone, the CPI rose 3.5 per cent compared to the same month a year earlier, up from 3.4 per cent in February.

A closely watched measure of core inflation, the trimmed mean, rose 1 per cent in the first quarter, above forecasts of 0.8 per cent. The annual pace slowed to 4 per cent, from 4.2 per cent.