RESERVE BANK AND INTEREST RATES : FOOD INFLATION IS A BIGGER ISSUE THAN OIL AND THE RBA KNOWS IT

What happened: Global food prices have climbed sharply this year, with cocoa, rice, wheat and other staples rising, and the Reserve Bank is watching food inflation as its next inflation headache. Key numbers: Cocoa beans rose from just under $US2900 a tonne to more than $US5600. Why it matters: The article argues food inflation is a bigger problem for the Reserve Bank than oil because higher interest rates will do little to lower food prices, and it raises the prospect of a rate lift early next year.

Global food prices have climbed sharply this year, with cocoa, rice, wheat and other staples rising, and the Reserve Bank is watching food inflation as its next inflation headache.

The article argues food inflation is a bigger problem for the Reserve Bank than oil because higher interest rates will do little to lower food prices, and it raises the prospect of a rate lift early next year.