The February consumer price index (CPI) for Australia is expected to rise 0.1%, holding the annual pace flat at 3.8%, the third month in a row at this pace, Westpac said in a Tuesday report.

The trimmed mean estimate for the month is estimated to clock in at 0.3%, holding the annual pace at 3.4%, with the six-month annualized pace rising to 3.6% from 3.4%.

The March quarter CPI is expected to come in at 1.2% quarter over quarter, raising the annual pace to 3.9% from 3.6%. The preliminary estimate for the March quarter trimmed mean is 0.9%, with the annual pace lifting to 3.5% from 3.4%.

Westpac now expects headline inflation to peak at 4.6% on an annual basis in the June quarter before easing back to 3.9% by end of the year in the wake of the conflict in the Middle East, assuming that the Strait of Hormuz is closed for one month. Core inflation is estimated to climb to 3.6% on an annual basis at the June quarter.

Higher energy prices are expected to flow into headline inflation primarily through fuel and transport costs, the report said. Retail petrol and diesel prices are forecast to average around AU$2.02 per liter and AU$2.50 per liter, respectively, in the June quarter. The bank calculated that the energy shock adds up to 0.8 percentage points to headline inflation at its peak.