Inflation surge signals higher interest rates

 The Reserve Bank of Australia is almost certain to increase rates at its February meeting in an attempt to drive the inflation rate back down into its 2 to 3 per cent comfort zone. Key contributors to the inflation result were petrol, up 7.3 per cent in the last quarter, and rents which increased 1.6 per cent over the same period.

Rises in most food categories were offset by a 13.5 per cent fall in the price of fruit and a 6.9 per cent reduction in the price of vegetables. Mr Swan has called on unions, employers and employees to avoid adding fuel to the fire and exercise restraint in any wage claims.