Why the latest inflation figures are bad news for Aussies struggling with the cost-of-living crisis

Home borrowers face another interest rate hike with inflation climbing again.

The consumer price index grew by 3.8 per cent in the year to June, putting it even further above the Reserve Bank’s 2 to 3 per cent target.

The latest headline inflation numbers are even worse than the March quarter’s 3.6 per cent annual pace – stirring fears the RBA could raise rates against, despite borrowers already dealing with the most aggressive increases since the late 1980s.

Another rate rise would take the cash rate to a 13-year high level of 4.6 per cent and mark the 14th increase in little more than two years.

Alcohol and tobacco had the biggest price increases of 6.8 per cent, followed by insurance and financial services on 6.4 per cent and health care on 5.7 per cent.

Inflation has been above the Reserve Bank target for the past three years, as Sydney joined Melbourne in a long Covid lockdown. 

The latest numbers have stirred fears the RBA could raise rates against, despite borrowers already dealing with the most aggressive increases since the late 1980s (pictured, Coles shopper)

Borrowers have seen their monthly mortgage repayments skyrocket by 68 per cent since the Reserve Bank began hiking rates in May 2022. 

A higher inflation rate means welfare payments are increased at a higher rate through indexation.

But it also means alcohol and fuel excise increases at a steeper pace.