Australia: Inflation soars and thousands more face losing their homes

Although the headline result was 4.2 percent, the annualised rate for the March quarter was 5 percent. Over the past year, household budgets have been hit by rises of 18.9 percent for petrol, 10.5 percent for electricity and 5.7 percent for food. Bank fees rose 7.6 percent and rents by 7.1 percent. Secondary education costs rose by 6.6 percent, while health costs were up 5.4 percent.

ANZ bank senior treasury economist Warren Hogan described the results as a shocker. He warned journalists that the headline inflation rate could rise to 5 percent this year. The problem is not just that inflation is elevated but that it is accelerating. If anything, inflation pressures are intensifying.

The March quarter result is well above the Reserve Bank of Australia (RBA) target range of 2-3 percent, and belies the forecast made by RBA governor Glenn Stevens just two weeks ago that inflation was likely to decline over time. Stevens made the comments in the context of explaining why the RBA board decided to keep interest rates on hold last month, after a dozen 25-basis point rises since 2004.