Australia's headline inflation rate has fallen more sharply than expected, but a rise in the underlying measure will be cause for concern at the Reserve Bank.
A decline in petrol prices as a result of the government's fuel excise cut caused the increase in the annual consumer price index to slip to 4.2 per cent in April, from 4.6 per cent the previous month, the Australian Bureau of Statistics reported on Wednesday.
Forecasters had been expecting the headline inflation rate to fall to 4.4 per cent.
However, the trimmed mean, which omits volatile items and gives a better sense of the underlying pulse of price increases, edged up to 3.4 per cent, in line with the consensus of forecasters.
While the slightly softer-than-expected reading won't add to the case for more rate hikes, the RBA board will be wary not to take too much confidence from one month of data.
