Australia’s monthly inflation rate rose to its highest level in 2024 in May, suggesting that the Reserve Bank of Australia (RBA) will not be cutting interest rates soon and might even hike them again.

According to a report by the Australian Bureau of Statistics published on Wednesday, consumer price inflation in Australia rose to four per cent in May from 3.6 per cent in April. Economists had predicted inflation to rise to 3.8 per cent. Core inflation, which excludes volatile items and holiday travel, also came in at four per cent, down from 4.1 per cent in April.

With inflation still running above its target band of two to three per cent, the RBA warned it is wary of upside risks. It has held interest rates steady at a 12-year high of 4.35 per cent for five meetings in a row.

Meanwhile in the US, consumer confidence wavered in June as Americans felt less cheery about the future, data released on Tuesday showed.

The Conference Board Consumer Confidence Index, an indicator that attempts to predict future consumer spending and economic activity, fell 0.9 points to 100.4 in June. The figure for May was revised down to 101.3 from 102.0 when it rose after falling for three successive months and bounced back up from its lowest level since July 2022.

Consumer confidence has been weakening over the last couple of years, as Americans are paying more for their purchases, are facing higher borrowing costs, and worry about the recent softening in the labour market.

Finally, UK retail sales declined in June after rising in May, and retail outlets anticipate another drop next month, the CBI Distributive Trades Survey showed on Wednesday.

A net 24 per cent of retailers said sales declined in the year to June, reversing a moderate recovery in May. The retail sales balance was forecast to fall to +1 per cent from +8 per cent in May. About nine per cent of respondents said the sales volume would fall in July. Furthermore, around 29 per cent said sales volumes are expected to remain below seasonal norms in July.

“Unseasonably cold weather in June may have played a role, but it’s notable that internet retail sales fell sharply in our survey, too,” Alpesh Paleja, interim deputy chief economist at the CBI, said.

This article does not constitute legal and/or financial advice and is being issued for information purposes only by Bank of Valletta plc, 58, Zachary Street, Valletta. Bank of Valletta is a public limited company regulated by the MFSA and is licensed to carry out the business of banking and investment services in terms of the Banking Act (Cap. 371 of the Laws of Malta) and the Investment Services Act (Cap. 370 of the Laws of Malta).