Budget reality check for Chalmers after high home-grown inflation

Stubbornly high home-grown inflation in the first three months of 2024 has blindsided Treasurer Jim Chalmers’ budget preparations as economists warned new government spending could further delay interest rate cuts.

Inflation accelerated to a stronger-than-expected 1 per cent in the first three months of 2024, up from 0.6 per cent over the December quarter and solidly above market expectations of 0.8 per cent, reinforcing a growing consensus that interest rates will stay higher for longer even without more spending.