Australia's central bank warns on inflation

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SYDNEY, Nov 12 (AFP): Australia's central bank today warned that inflation was likely to be higher than it hoped at 3.25 per cent in the final quarter of 2007, increasing the likelihood of further interest rate rises.
The predicted figure for consumer price index (CPI) inflation is above the bank's target rate of 2-3 per cent.
"Given the recent pattern of quarterly outcomes, both CPI inflation and underlying inflation measures are likely to rise above three per cent on a year-ended basis over the next two quarters," it said in a quarterly monetary statement.
Underlying inflation in the third quarter of 2007 was 3.0 per cent year-on-year, prompting the central bank's move to raise interest rates last week.