The rate of inflation in the Australian economy is soaring from the past few months. The problem has created a serious pressure on prices.

RBA makes use of the Consumer Price Index to measure the rate of inflation. The CPI, till the month of March, clearly indicated that the rate of inflation rose to 2.9%.

Items including food products, vegetables, groceries, housing, electrical appliances, property, as well as, the insurance services, is now costly than before.

The economists also stated that there are no chances of Reserve Bank to change their fiscal and monetary policy next week. The meeting, which is going to be held next week, will once again fix the cash rate at
4.5%.

It has been noticed that the RBA is constantly keeping the cash rate same from the last two months.

With the chances of a double-dip recession in the global economy this year, economists are afraid that it might be very difficult for the financial markets to show any signs of recovery.

Some market researchers are also of the view that RBA can change the cash rate in this month's meeting. The inflation has badly hit the economy, so there are chances that RBA can increase the cash rate by 0.25%.

RBC Capital Markets Senior Economist, Su-Lin Ong said, ''It is a combination of the very uncertain global backdrop and increasing downside risk to global growth".