Australia's stubborn inflation may trigger a rate rise

Significance The uptick in inflation also raises questions about the Labor government’s efforts to reduce living costs as it prepares for an election in mid-2025. Opinion polls indicate that voters would prefer to have the opposition Liberal-Nationals alliance managing the economy. Impacts Unexpected consumer spending on services is pushing up prices, and the effect on inflation may be hard to contain. Economic growth will remain flat in the second quarter although activity should pick up as public spending recovers. Conservative opposition parties are capitalising on Labor’s inability to bring down living costs.