Housing and education were among the main drivers of inflation in the March quarter
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SYDNEY—Australian consumer price inflation remained strong in the latest quarter, illustrating the challenge the country’s central bank faces in bringing inflation back to target and adding uncertainty around the timing of interest-rate cuts.
The consumer-price index rose by 3.6% in the March quarter from a year earlier, meaning the annual inflation rate is now more than half of its peak at the end of 2022, data from the Australian Bureau of Statistics showed. Still, CPI rose by 1.0% on a quarterly basis, accelerating from the 0.6% increase recorded for the three months through December.
The ABS’s monthly CPI indicator rose 3.5% in the 12 months to March.
Housing and education were again among the main drivers of inflation in the March quarter. “Rents continue to increase at their fastest rate in 15 years,” Michelle Marquardt, head of price statistics at the ABS, said on Wednesday.
Central banks around the world are finding the last mile in their battle to tame inflation to be the hardest since they began raising interest rates at an unprecedented clip in the aftermath of the Covid-19 pandemic. That challenge has led to a redrawing of expectations around when central banks will start to loosen policy and provide borrowers with relief on debt costs.
In the U.S., stubborn inflation persisted in March, derailing the case for the Federal Reserve to begin reducing interest rates in June. Higher-than-expected CPI rattled asset classes, pushing stocks down on the day that the report was released and driving up bond yields.
Many of the drivers of inflation in the U.S. also confront the Reserve Bank of Australia in its deliberations around when to pivot toward a dovish stance on rates. Global energy prices are higher on geopolitical tensions, which is significant for Australia as a large importer of crude oil.
Still, Australia also faces domestic price pressures in areas such as healthcare and housing that complicate the RBA’s efforts to get inflation back into its 2% to 3% target band by the end of next year and muddy the outlook for interest rates.
The next few months are likely to witness such events as a reasonably big rise in the minimum wage of Australian workers and the delivery of generous income tax cuts midyear. These will coincide with a federal budget that is likely to include new spending measures designed to take the pain out of rising living costs.
As a result, economists are divided over whether the RBA will be confident enough that inflation is under control to cut interest rates this year, and some think it will be the last major central bank to loosen policy.
The Australian dollar strengthened against the greenback as investors bet on the RBA staying on hold for longer in the wake of the CPI data. Australian government bonds slumped in response to the strong inflation data, with both 2- and 10-year yields rising after the release.
Westpac on Wednesday scrubbed its call that the central bank would lower interest rates in September, instead seeing a maiden cut in November.
“All told, the data reinforce our conviction that the RBA is unlikely to cut rates before 4Q,” said Abhijit Surya, Australia and New Zealand economist at Capital Economics. “If anything, the slew of upside surprise raise the risk that the bank will feel the need to hike rates further.”
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With US$40 million already committed, the Global Talent Fund is attracting investor attention with a strategy focused on building globally scalable consumer brands alongside high-profile talent.
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A new investment fund targeting celebrity-founded consumer brands has secured US$40 million in commitments and is rapidly approaching its US$50 million fundraising target, signalling growing investor appetite for alternative opportunities beyond traditional asset classes.
The Global Talent Fund, which has a maximum raise of US$100 million, focuses on building and investing in consumer businesses alongside celebrities, athletes, and influential personalities who play an active role as co-founders rather than simply endorsing products.
The strategy is based on the belief that changes in consumer behaviour, particularly the rise of social media and digital engagement, have fundamentally altered how brands are built and scaled.
GTF founding partner Jeremy Hunt, who is helping lead the fund’s strategy, said consumers increasingly feel connected to personalities they follow online and are more willing to support products developed by those individuals.
“Consumers are searching for content to engage with, and when a celebrity they like or follow takes them on the journey of creating a product or brand, they genuinely feel part of that process,” he said.
The fund is targeting high-growth consumer sectors including wellness, hydration, beauty and recovery, areas Hunt believes continue to benefit from strong global demand and ongoing innovation.
Rather than backing celebrity endorsement deals, the fund is seeking businesses where talent is deeply involved in product development, brand creation and long-term growth.
According to Hunt, authenticity remains one of the biggest differentiators between successful celebrity-backed brands and those that fail.
“The consumer can see clearly if someone is simply being paid to promote a product,” he said. “The winners are typically the brands where the celebrity has genuinely helped build the business from the ground up.”
The model has attracted support from several prominent Australian investors and business families, reflecting broader interest in alternative investments with global growth potential.
Hunt said consumer brands offered a level of tangibility that many investors found appealing.
“Consumer brands are what we touch, feel, smell and taste every day,” he said. “Our investors understand the growth potential in the model, but they also want to be part of the journey.”
The fund’s rapid progress towards its fundraising target comes amid growing recognition that celebrity influence, when combined with strong commercial execution and scalable business models, can create significant enterprise value.
With several high-profile celebrity-founded businesses generating billion-dollar exits in recent years, supporters of the strategy believe the opportunity remains in its early stages.
