So what drove inflation higher?
Well, there were the obvious candidates: petrol, housing and rents and the spillover of the interest rate rises.
Fuel costs were the most obvious and the ABS said in its release that the 3.1% increase in transportation costs in the June quarter was mainly due to the rise in the price of automotive fuel (+8.7%).
"There were minor increases in most other categories of transportation, with motor vehicle repair and servicing (+0.8%) and other motoring charges (+0.8%) being the most significant. There was a small offsetting fall in the price of motor vehicles (–0.1%).
"Over the twelve months to June quarter 2008, the transportation group rose 6.9%, with the main contributors being automotive fuel (+18.4%), motor vehicle repair and servicing (+3.4%), other motoring charges (+5.3%), urban transport fares (+4.9%) and motor vehicle parts and accessories (+5.0%). There was an offsetting fall in motor vehicles (–1.3%).
"At the All groups level, the CPI rose in all capital cities this quarter. Brisbane rose 1.7%, Perth rose 1.6%, Sydney and Darwin rose 1.5%, Adelaide rose 1.3%, Melbourne and Canberra rose 1.2%, while Hobart rose 1.0%.
"Deposit and loan facilities and automotive fuel were the main contributors in all cities. Rents also rose strongly in most cities. Food prices were generally less significant and fell in some cities due to the impact of falls in fruit and vegetable prices.
"The relatively lower increase for Hobart was mainly due to smaller than average contributions from financial and insurance services, housing and food, combined with a stronger than average fall in recreation and a fall in household contents and services where other cities showed rises."
The ABS said that over the year to June quarter 2008, the All groups CPI rose in all capital cities with the increases ranging from 3.5% in Hobart to 5.1% in Brisbane.
The higher result in Brisbane is largely due to stronger than average contributions from housing, transportation and clothing and footwear. Sydney was up 4.3% for the year.
The ABS said that the 3.8% rise in financial and insurance services this quarter is a result of increases in deposit and loan facilities (+9.5%) and insurance services (+2.5%), offset by a fall in other financial services (–2.9%).
The rise in the price of deposit and loan facilities has occurred at a time when banks are facing increased costs due to the global financial crisis.
As foreshadowed in the March quarter 2008 publication, the ABS is continuing to work with data providers, and reviewing and updating where necessary, a range of methods relating to the collection and compilation of financial sector output, income, transactions, positions and prices.
As a result of this work, this quarter’s results include a correction for under–estimation in the previous quarters’ estimates. This work is continuing and further improvements in sources and methods may lead to additional corrections.
Over the twelve months to June quarter 2008, financial and insurance services rose 9.9%, with increases in the prices of all components – deposit and loan facilities (+16.2%), insurance services (+7.0%) and other financial services (+3.1%).
The 1.1% rise in housing this quarter was mainly due to rents (+2.2%) and house purchase (+1.0%). Electricity (–1.4%) provided a small offsetting fall.
The increase in average rents is the largest quarterly increase since March quarter 1989. Average rents rose in all capital cities, ranging from 1.0% in Hobart to 3.3% in Perth.
Increases in house purchase prices were recorded in all capital cities, ranging from 0.3% in Melbourne to 1.4% in both Brisbane and Adelaide.
Over the twelve months to June quarter 2008, the housing group rose 6.0%, mainly due to rents (+7.7%), house purchase (+5.0%) and electricity (+9.8%). Annually, the strongest increases in housing were in Brisbane (+8.0%), Canberra (+6.7%), Melbourne and Darwin (both +6.0%). Perth recorded the smallest increase (+4.8%).
Most categories of household contents and services rose (up 1.6% overall) this quarter with increases in furniture (+3.1%), other household supplies (+2.1%), towels and linen (+3.8%), glassware, tableware and household utensils (+2.6%), major household appliances (+1.8%) and floor and window coverings (+1.6%). There were no significant price falls.
The rises were largely due to the March quarter seeing the end of widespread discounting associated with post–Christmas and summer sales at major retailers in most cities.
There were increases in gross child care fees and increases in the number of families exceeding thresholds for the Child Care Benefit as family income levels rose, meaning that the net benefit of the subsidy was reduced. This had the effect of a small increase (+1.2%) in out–of–pocket expenses.
Through the year to June quarter 2008, the household contents and services group fell 0.6%, mainly due to a fall of 28.7% in the net price of child care.
This was due to the impact of the inclusion in the September quarter 2007 of the Child Care Tax Rebate (CCTR) as a rebate for the first time and the additional 10% indexation of the Child Care Benefit (CCB) rates on top of the usual annual CPI indexation.
All four components in the alcohol and tobacco group rose (up 1.9% overall) in all cities this quarter with price increases in spirits (+6.1%), tobacco (+
