Institution: Australian inflation expected to peak in the second quarter, possibly raising interest rates in May.

During the ongoing turmoil in the Middle East, the National Australia Bank continues to adjust its inflation forecast for Australia. The National Australia Bank predicts that both overall inflation and core inflation will peak in the second quarter of 2026, with the trimmed mean inflation rate reaching 3.9% year-on-year and overall inflation rate reaching 4.9% year-on-year. The economist Taylor Nugent of the National Australia Bank stated that the scale of this energy shock "exceeds historical experience". He added that despite fuel prices possibly decreasing month-on-month in April, it is expected to still push up inflation in the second quarter. The National Australia Bank predicts that the Reserve Bank of Australia will make a final 25 basis point rate hike in May, raising the interest rate to 4.35%.