Australia core inflation hits 17-year high

By Wayne Cole SYDNEY, July 23 (Reuters) - Core inflation in Australia accelerated to its fastest annual pace in 17 years last quarter as the cost of fuel, financing and rents all climbed, suggesting interest rates would have to stay high for some time to come. Still, the pick-up was much as expected by the Reserve Bank of Australia (RBA) and should not shake its belief that a cooling economy will curb price pressures over the next year or two. "Inflation is still too high, but the Reserve Bank believes demand is slowing and prices will ease in time," said Brian Redican, a senior economist at Macquarie. "The next move in rates is likely to be down, but not for a long while yet." Investors saw the data reaffirming the staus quo on policy and the Australian dollar stayed soft as the market priced in a steady 7.25 percent cash... [read full story]