The Annual rate of inflation in Australia reached 4.2 percent for the first time in seven years. According to the the Australian Bureau of Statistics, the consumer price index increased by 1.3 percent and resulted in a more than 4 percent annual inflation rate.
Fast rising prices of gasoline, pharmaceuticals, electricity and food pushed annual inflation beyond the Australian Reserve Bank's targeted inflation rate of 2 to 3 percent.
To bring the level of inflation under control, the bank has reduced the benchmark interest rate from time to time. In the last month, the Bank raised rates to 7.25 percent.
Due to the global credit squeeze, nearly all Central Banks around the world have raised rates in the last two quarters.
The presence of a high inflation rate is expected to pressure the country's central bank to raise interest rates further.
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