AP

Australia’s rising inflation lifts risk of 4th rate hike

Jul 26, 2022, 9:00 PM | Updated: 11:04 pm

Shoppers look at produce at a shopping center in Sydney on Wednesday, July 27, 2022. Inflation in t...

Shoppers look at produce at a shopping center in Sydney on Wednesday, July 27, 2022. Inflation in the year through June was 6.1%, up from 5.1% in the year through March, the Australian Bureau of Statistics said. (AP Photo/Rick Rycroft)

(AP Photo/Rick Rycroft)

CANBERRA, Australia (AP) — Australian inflation rose farther, according to new data released on Wednesday that increases the likelihood of the central bank next week hiking interest rates for a fourth consecutive month.

Inflation in the year through June was 6.1%, up from 5.1% in the year through March, the Australian Bureau of Statistics said. Inflation only rose by 3.5% during the last calendar year.

Economist Angela Jackson, from the consultancy Impact Economics and Policy, predicted the Reserve Bank of Australia will lift the cash rate by half a percentage point to 1.85% at its next monthly board meeting Aug. 2.

The bank made rises of that size in its July and June meetings. The rate rose by a quarter of a percentage point in May, the first rate hike in more than 11 years.

“In terms of the headline figure at 6.1, it is still very high … and it means interest rates will probably go up again next month,” Jackson told Australian Broadcasting Corp.

Treasurer Jim Chalmers warned that inflation would rise further.

“We are not surprised to see inflation north of 6%, but it’s still confronting,” Chalmers said. “Inflation is high and rising. It will get tougher before it starts to ease.”

The center-left Labor Party government was elected in May and Parliament resumed Tuesday for the first time under the new administration.

Chalmers intends on Thursday to outline to Parliament Australia’s deteriorating economic outlook since the previous government announced its economic plan in March.

In March, Australia’s gross debt as a share of the economy was forecast to peak in mid-2025 at 44.9%, or 1.117 trillion Australian dollars ($773.2 billion). Net debt — gross debt less the value of selected financial assets — was predicted to peak at 33.1% of GDP, or 864.7 billion Australian dollars ($598.5 billion) a year later.

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Australia’s rising inflation lifts risk of 4th rate hike