Inflation's already looking vulnerable, with the reality of worse economic blows still to come. 

Figures out today showed annual CPI unexpectedly held at 3.1 in this year's first three months, confounding expectations it would fall as low as 2.8. 

Economist Cameron Bagrie says the rate reflects what was happening to prices, just as the cost of fuel began to climb, when the Iran war closed the Strait of Hormuz. 

He says we'll get an inflationary hit in the June quarter, and a better starting position would have been preferable. 

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