Plenty of inflation still in the pipeline for Australia

While the pickup in Australia’s inflation rate in Q1 fell short of the analyst consensus, it remains far too high for the RBA’s comfort. Moreover, with the indirect effects of higher energy prices on food and construction costs yet to filter through, a significant inflationary pipeline persists. Therefore, despite the potential for another split decision at the Bank's meeting next week, the case for further policy tightening remains intact.