Inflation surges to three-year high as borrowers brace for potential third consecutive interest rate hike

New data from the Australian Bureau of Statistics released this morning shows the consumer price index rose 4.6 per cent in the 12 months to March, up from 3.7 per cent in February.

According to the ABS, fuel costs rose by a whopping 32.8 percent in March – the highest monthly increase on record.

However, on the upside for borrowers fearing another rate hike, the reduced average – the RBA’s preferred measure of underlying inflation – remained stable at 3.3 percent.

Prior to today’s data, financial markets had priced in a roughly three-quarters chance of a rate hike when the RBA’s monetary policy board meets next week, with all four major banks predicting a rate hike.