August inflation hits 4%; RBA likely to hike rates Tuesday
Inflation jumped to 4% in August, and markets see a 65% chance the RBA will raise rates this week.
Prices are climbing faster than they were three months ago. In August, headline inflation rose to 4 per cent from 3.5 per cent in July, mainly because housing and fuel costs went up.
The RBA will decide this coming Tuesday whether to raise interest rates for a fifth time this year. Markets reckon there is about a 65 per cent chance of a hike.
When rates go up, home loans and business loans become more expensive, which makes people and companies spend less, and that can slow inflation down. The catch is that households with variable mortgages face bigger repayments straight away.
- 4%
- August inflation rate
- 3.5%
- July inflation rate
- 65%
- Probability of rate hike
- 5th this year
- Rate hikes planned in 2026
Why it mattersHigher rates hit your home loan costs now, and rising inflation means your money buys less at the shops.
AustraliaAustralian homeowners on variable mortgages face larger payments if the RBA hikes; grocery and fuel costs remain under pressure as inflation stays above the RBA's 2-3% target.
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