Cash Rate Hike Followed by Soaring Inflation

Homeowners have been dealt another blow as inflation jumped to 4% in August, up from 3.5% in July, according to the Australian Bureau of Statistics. This increase comes just a day after the Reserve Bank raised the cash rate to 4.6%, its highest level in 15 years.

The Reserve Bank's decision was made without access to August's consumer price index, which was released on September 30. Governor Michele Bullock acknowledged that the timing of the release was 'unfortunate', but noted that the bank had set its monetary policy meetings 18 months to two years in advance and couldn't change them.

The rise in inflation is largely driven by rising costs for housing, which increased 5.7% over the past year, and transport, which rose 5.6% due to higher fuel prices. Westpac is predicting another interest rate hike in November, while the Commonwealth Bank of Australia and NAB are warning of a possible increase.

Trimmed mean inflation, which excludes the top and bottom 15% of goods and services, remained steady at 3.6%. The Reserve Bank has made it clear that it will continue to raise interest rates as long as inflation remains above its target range of 2-3%.