Interest rate hikes remain on cards as Australia’s underlying inflation climbs, economists warn

Despite plunging fuel prices, trimmed mean inflation increased from an annual pace of 3.4% to 3.6%

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Australia’s inflation challenge is far from over and more Reserve Bank rate hikes remain on the cards, economists warn, even after a plunging petrol costs drove an unexpected fall in consumer price growth in the year to May.

Annual inflation dropped to 4%, from 4.2% in the year to April, according to the Australian Bureau of Statistics, dragged down in large part thanks to a nearly 12% drop in fuel prices in the month of May.