SYDNEY, AUSTRALIA - DECEMBER 06: Pedestrians and shoppers move along George Street on December 06, 2024 in Sydney, Australia.

Lisa Maree Williams | Getty Images News | Getty Images

Australia's inflation rate soared to 4.09% in the first quarter from a year earlier, marking its highest level in more than two years.

The reading was lower than the 4.2% expected by economists polled by Reuters, but it still raised the prospects of an interest rate hike by the Reserve Bank of Australia.

Prices increased 1.4% from the previous quarter. In March, inflation climbed to 4.6%, driven mainly by higher costs for housing, transport and food.

The 4.6% reading was the highest since Australia began publishing monthly consumer price index data in 2025.

The data also comes ahead of the Reserve Bank of Australia's policy meeting next week.…