Institution: Australian businesses may not have passed on higher costs

Economists from Australia and New Zealand Bank stated that inflation data in Australia indicates that businesses may find it difficult to pass on higher costs to consumers quickly. With overall inflation rising by 0.35% in April, lower than expected, these economists have seen little evidence of the sharp increase in purchasing prices shown in a recent business survey by the National Bank of Australia. They do predict that prices in more expenditure categories will rise in the coming months, but remain relatively optimistic about the overall situation. They point out that trimmed mean inflation is only slightly above the upper limit of the Reserve Bank of Australia's target range and still expect the overnight cash rate to remain unchanged at 4.35%.