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Inflation hits home: Largest fuel price increase in Australia since 1990

The price of fuel climbed a whopping 32% in 2021, putting steady pressure on consumers’ wallets throughout the year, the Reserve Bank of Australia has found.
The price of fuel climbed a whopping 32% in 2021, putting steady pressure on consumers’ wallets throughout the year, the Reserve Bank of Australia has found. In its February Statement on Monetary Policy, the central bank said inflation had picked up faster than expected, with a handful of key goods – such as fuel, new dwellings and durable costs – spurring much of the growth. New dwelling prices climbed 4.2% over the year as builders passed on the higher cost of materials – up 12% in 2021 – to consumers, while consumer durable prices lifted 1.5% in the December quarter alone. That’s the strongest quarterly increase for these goods since 2009. Meanwhile, the 32% lift in fuel prices marks the single largest annual increase since 1990. And while these goods made outsized contributions to overall inflationary data, the RBA cautioned inflationary pressures were also broadening – three-fifths of the CPI basket had annualised inflation over 2.5% for the year, up from two-fifths prior to the pandemic. The central bank also raised its inflation forecasts for the next two years, and now expects inflation for the year ending December 2023 to come in at 2.75%, rather than the 2.5% previously anticipated.     “The forecast profile for underlying inflation is noticeably higher in the near term, reflecting stronger pass-through of upstream cost pressures to consumer prices than was assumed in the November Statement,” the RBA’s statement noted. “Underlying inflation is forecast to increase to 3.25% by mid-2022 before easing as international and domestic supply chain pressures subside.  “Further out, the tightening labour market and resulting lift in labour costs is forecast to sustain underlying inflation in the top half of the target range of 2-3%.” This inflationary pressure comes as the US battles to contain its fastest rate of inflation in almost 40 years, with the Federal Reserve already signalling plans to raise rates multiple times this year to cool the economy down. Prices bolted 7% in the US last year, with core inflation – a measure that excludes changes in volatile fuel and food prices – hitting an annual rate of 5.5%. Join us for a live investor briefing tomorrow at 11am (AEDT) regarding an opportunity for wholesale investors in a product issued by C2 Specialist Investments Pty Ltd that you can use to potentially hedge against the effects of looming inflation and benefit from divergent stocks. Book your spot. You should read the C2 – Gateway – Series 40 Units Term Sheet PDS that has been issued by C2 Specialist Investments Pty Ltd  before making any decision on this wholesale only investment. Any advice is general only and does not consider your objectives, financial situation or needs, and you should consider whether it’s appropriate for you. Reach* are the advisors assisting with the management of this offer and may receive fees depending on whether an offer is taken up by investors. Past performance is not an indicator of future performance.
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