Prices paid by businesses continue to rise sharply

Submitted 27/01/2009

AAP

Prices paid by businesses rose sharply in the December quarter, partly as a result of high import prices because of a weakened Australian dollar.

The December quarter producer price index showed prices in the final stage of production grew 1.3 per cent after accelerating by a record 2.0 per cent in the previous three months, data released by the Australian Bureau of Statistics today showed.

In annual terms, the PPI grew 6.4 per cent, the highest level since the data series began in 1999, after surging to 5.6 per cent in the 12 months to September.

Economists had forecast December quarter PPI to rise just 0.3 per cent for an annual rise of 5.4 per cent.

However, economists doubt the result will deter the Reserve Bank of Australia from resuming its aggressive rate cutting stance to guard against a recession when its board meets next week.