Fed: Higher wholesale prices spark warning note on inflation

AAP General News (Australia)
04-27-2004
Fed: Higher wholesale prices spark warning note on inflation

Higher-than-expected wholesale prices have sounded a warning note for future inflation
and potential for interest rate rises.

Official figures released today show domestic price pressures continue to build despite
another fall in the cost of imported goods, thanks to a stronger Australian dollar.

The Australian Bureau of Statistics' producer price index has risen 0.6 per cent in
the March quarter for the final stage of production, compared to market expectations of
a 0.4 per cent increase.

Westpac senior economist JUSTIN SMIRK says the figures reinforce the view that inflation
can only keep rising from now on.

The Reserve Bank meets on interest rates again next week and has signalled concerns
about the future risk to inflation.

AAP RTV kmh/bt/as

KEYWORD: ECONOMY (CANBERRA)

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