Reserve Bank Faces Second Blow as Inflation Surges Past Expectations

Homeowners received another blow as inflation surged to 4% in August, up from 3.5% in July, according to Australian Bureau of Statistics figures released on September 30.

This increase comes just a day after the Reserve Bank raised the cash rate to 4.6%, its highest level in 15 years, without having access to the full inflation data for August.

Reserve Bank governor Michele Bullock acknowledged that the timing of the index release was unfortunate but stated that the bank's decision-making process is based on data available 18 months to two years in advance.

The bank will continue to raise interest rates as long as inflation remains above its target range of 2-3%, and Westpac predicts another rate hike in November, while Commonwealth Bank of Australia and NAB warn of a risk of another increase.