The Australian Bureau of Statistics’ (ABS) latest reading shows headline inflation eased in February to 3.7%, while underlying inflation rose 3.3% in the year to February. The biggest drivers of inflationary growth are housing (+7.2%), food (+3.1%) and recreation and culture (+4.1%). Dairy product prices rose to +2.7% in February, edging up from +2.6% in January but lower than its November peak of +3.2%.

Conflict in the Middle East risks pushing inflation as high as 5% this year, according to Treasurer Jim Chalmers as global oil prices continue to climb with only limited transport allowed through the Strait of Hormuz. Last week, the Reserve Bank raised the official cash rate for the second straight month as inflation continues above its target range of 2%-3%.