CANBERRA, AAP – Price pressures in Australia accelerated in the December quarter with annual inflation rising to 3.5 per cent and beyond the Reserve Bank’s two to three per cent target.

This compared with three per cent as of the September quarter.

The Australian Bureau of Statistics said the consumer price index jumped 1.3 per cent in the quarter with significant rises in the cost of new dwellings and petrol prices.

“Shortages of building supplies and labour, combined with continued strong demand for new dwellings, contributed to price increases for newly built houses, townhouses and apartments.” ABS head of prices statistics Michelle Marquardt said

“Fuel prices rose again in the December quarter, resulting in a record level for the CPI’s automotive fuel series for the second consecutive quarter.”

Annual underlying inflation – which smooths out wild price swings – rose to 2.6 per cent, up from 2.1 per cent in the September quarter.

Ms Marquardt said this was the highest since 2014, reflecting the broad-based nature of price increases, particularly for goods.