Fears grow for fourth rate hike after higher than expected July inflation rate

Bureau of Statistics says CPI was 3.5% in July, casting doubt on Reserve Bank meeting its 2.5% inflation target without further hike Follow our Australia news live blog for latest updates Get our breaking news email , free app or daily news podcast Fears are growing that the Reserve Bank will hit millions of mortgage holders with a fourth rate hike this year, after inflation eased in July but by far less than expected. Consumer prices climbed by 3.5% through the year, down from 3.8% in the previous month, according to the Australian Bureau of Statistics . That compared unfavourably to the forecast 3.3% annual rate predicted by economists leading into the result. The Reserve Bank’s preferred underlying inflation measure, which removes the most volatile prices, had been expected to moderate but instead was stuck at 3.6%. While the decision on 11 August to hold the cash rate at 4.35% was unanimous, a number of board members thought another hike this year was “quite possible”.

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