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(Bloomberg) — Australia’s monthly inflation gauge accelerated in August, reflecting global trends as oil prices jumped, bolstering the case for the Reserve Bank to raise interest rates at least one more time.

The consumer price indicator rose 5.2% from a year ago, matching estimates, Australian Bureau of Statistics data showed Wednesday. The result bucks three months of slowdown in the pace of price gains and will be a focus for new RBA Governor Michele Bullock, who chairs her first board meeting next week.

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The RBA has placed itself in data-dependent mode after lifting borrowing costs 12 times since May 2022 to 4.1%. It has paused at the past three meetings, reflecting the cooling in consumer prices. The Australian dollar and the yield on policy-sensitive three-year bonds were little changed in response to the data.

The CPI report showed that excluding volatile items, annual inflation eased to 5.5% in August from 5.8%, still well above the RBA’s 2-3% target. Reinforcing that, the trimmed mean gauge, another core measure, held steady at 5.6%.

The data vindicate the RBA’s stance that further tightening may be necessary and that it’s too early to declare victory over inflation. Australia has moved more cautiously in this cycle than its counterparts — its 4 percentage points of hikes compare with 5.25 by New Zealand and the US. 

“The RBA is likely to deliver another steady rate decision next week,” said Su-Lin Ong, chief economist at Royal Bank of Canada. “While heading in the right direction, the elevated pace of core inflation will keep a tightening bias firmly intact. We expect another discussion next week over 0 or 25-basis points.”

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Wednesday’s report comes after core consumer prices in the US marked their first acceleration in six months in August, adding to concerns that a renewed momentum in the economy was reigniting price pressure. The Federal Reserve will receive the next set of inflation data on Sept. 29. 

Australia’s monthly inflation is one of the last major pieces of data that Bullock will see before meeting on Tuesday, when policymakers are largely expected to hold rates steady. 

The RBA has been on pause since July to assess the impact of its tightening campaign amid a mixed economic picture — consumers have slowed spending as they are forced to allocate a rising proportion of their income to mortgage repayments while corporate confidence is still holding up. 

The labor market is also tight with hiring staying strong and the jobless rate holding in a 3.5-3.7% range over the past year. 

Australian Treasurer Jim Chalmers acknowledged that inflation remains the “primary challenge” for the nation’s A$2.3 trillion ($1.5 trillion) economy, while adding that price pressures are expect to resume easing.

“While inflation remains higher than we’d like for longer than we’d like, it is expected to continue to moderate over the year ahead,” he said in a statement. 

Today’s quarterly CPI report also showed:

—With assistance from Tomoko Sato.

(Adds comment from economist, Treasurer Jim Chalmers.)

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