Spot the difference.-----------------------------Australia3.4%...

Spot the difference.

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Australia

3.4% annual inflation to 29 February
3.5% annual inflation to 31 March
3.6% annual inflation to 30 April

4.35% interest rate

RBA says "Returning inflation to target (3% ?) within a reasonable timeframe (two years?) remains the Board’s highest priority."

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UK

2% annual inflation

5.25% interest rate (unchanged at yesterday's BoE meeting)

BoE is "committed to maintaining a restrictive monetary policy until inflation risks diminish sustainably."

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The RBA has run out of excuses for keeping rates low. If the CPI keeps rising then any more excuses from the RBA will be pure fiction, despite the RBA's unjustifiably high target and its unreasonably long timeframe. If next week's monthly CPI figure for May is high then it is likely that the XJO will fall and the AUD will rise in anticipation of a rate rise.