After moderating convincingly in the second half of 2023, progress to beat inflation has been frustratingly slow for policy makers.

For two months running, the Australian Bureau of Statistics’ consumer price index has recorded a faster pace of annual growth, inching higher each month to hit 3.6 per cent in April.

AMP Australia chief economist Shane Oliver said the May inflation gauge would likely clock a 3.8 per cent annual increase.

That said, the annual rise would in part be influenced by unfavourable base effects, while a 0.2 per cent decline is expected on a month-by-month basis largely thanks to falling prices at the petrol pump.

“May also has a seasonal tendency to weakness having fallen in four of the last six years,” Oliver wrote in a note.

The monthly gauge, due for release on Wednesday, offers useful insights but does not take a comprehensive view of price moves and can be volatile.

Quarterly inflation data, set to be released at the end of July, will be critical ahead of the Reserve Bank of Australia’s meeting in August.

While the cash rate stayed unchanged at 4.35 per cent again at the June meeting, where it has been since November, the RBA described the economic outlook as highly uncertain.

The central bank’s wariness was in part attributed to stronger-than-thought consumption and a minor uptick in inflation.

A speech by assistant governor at the RBA, Chris Kent, is due for release on Wednesday.

– AAP