Inflation Surge After Rate Hike Sets Stage for Further Monetary Policy Tension

Homeowners have suffered another blow as inflation jumped to 4% in August, just one day after the Reserve Bank raised the cash rate to 4.6%, its highest level in 15 years.

The Australian Bureau of Statistics released figures on September 30 showing that the consumer price index had risen from 3.5% in July.

Reserve Bank governor Michele Bullock acknowledged that the timing was unfortunate, given the bank's decision to raise interest rates without having access to August's inflation data.

The bank has been clear it will continue to increase interest rates as long as inflation remains above its target of 2-3%, which is now more likely with this latest jump in inflation.

Westpac predicts another rate rise in November, while the Commonwealth Bank and NAB warn there's a risk of further increases.