- Inflation rose 3.8 percent in the year to June
Home borrowers face another interest rate hike as inflation picks up again.
The consumer price index grew by 3.8 per cent in the year to June, still further above the Reserve Bank’s 2 to 3 per cent target.
The latest headline inflation figures are even worse than the March quarter’s 3.6 per cent annual pace, raising fears the RBA could raise rates, even though borrowers are already grappling with the most aggressive increases since the late 1980s.
Another rate hike would take the cash rate to a 13-year high of 4.6 percent and mark the 14th increase in just over two years.
Alcohol and tobacco saw the biggest price increases, up 6.8 percent, followed by insurance and financial services, up 6.4 percent, and health care, up 5.7 percent.
Inflation has been above the Reserve Bank’s target for the past three years as Sydney joined Melbourne in a lengthy Covid lockdown.
The consumer price index rose 3.8 per cent in the year to June, moving further above the Reserve Bank’s 2 to 3 per cent target (pictured, Sydney residents)
The latest figures have sparked fears that the RBA could push rates up, even though borrowers are already grappling with the most aggressive increases since the late 1980s (pictured, a Coles shopper)
Borrowers have seen their monthly mortgage payments soar by 68 per cent since the Reserve Bank began raising rates in May 2022.
A higher inflation rate means that welfare payments increase at a faster rate through indexation.
But it also means that excise taxes on alcohol and fuel are rising at a steeper pace.