Inflation edges higher in March: Midday roundup

The rate of inflation increased during the March quarter, but at a rate slower than expected, according to the latest figures from the Australian Bureau of Statistics.

The figures show the Consumer Price Index grew 0.4% in the quarter, with the annual rate now at 2.5%.

Seasonally adjusted CPI rose by 0.1% in the March quarter, and was up 2.5% in the 12 months to March.

The trimmed mean CPI rose 0.3% in the March quarter, at an annual growth rate of 2.2%. The weighted median CPI rose 0.5% in the quarter, at an annual rise of 2.6%.

The result of 2.5% places inflation squarely in the middle of the Reserve Bank’s 2-3% target.

Australian AAA credit rating at risk

Rating agency S&P has warned Australia its AAA credit rating is at risk if the budget deficit does not disappear.

S&P associate director Craig Michaels told The Australian it has informed the government and the opposition achieving a surplus is a priority.

“Given Australia’s low level of public debt, the government has space for some slippage in achieving its surplus targets given weaker-then-expected revenues,” he said.

While Michaels said small deficits are not usually a worry, there must be a plan to bring the budget back into balance.

Singapore Airlines increases stake in Virgin

Singapore Airlines is now the single largest shareholder in Virgin Australia, having upped its stake to 19.9%.

The airline paid $122 million for 255 million shares in an off-market agreement yesterday with Richard Branson’s Virgin Group, equating to $0.48 per share.

Singapore Airlines previously had a 10% stake in Virgin and the purchase of the new shares still requires the approval of the Foreign Investment Review Board.

Australian shares up on open

Australian shares have jumped on open, as the mining giants opened higher and major banks enter the reporting season.

The S&P/ASX200 benchmark was up 64.8 points just after midday to 5081.

Overnight the Dow Jones closed 152.29 points higher at 14719.46, up 1.05%.

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