The Annual rate of inflation in Australia reached at 4.2 percent for the first time in seven years. According to the the Australian Bureau of Statistics, consumer price index increased by 1.3 percent and resulting a more than 4 percent of annual inflation rate.
Faster rising prices of gasoline, pharmaceuticals, electricity and food pushed the annual inflation beyond Reserve Bank of Australia's targeted inflation rate of 2.0-3.0 percent.
To bring the level of inflation under control, the bank has reduced the bench mark interest rate from time to time. In the last month, the Bank raised rates to 7.25 percent.
Due to global credit squeeze, all most all the Central Banks over the world have raised rates in the last two quarters.
Presence of a high rate of inflation in the country's economy is expected to pressurize country's central bank to raise interest rate further.
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