Inflation has accelerated to 3.8 per cent in the year to June, data from the Australian Bureau of Statistics showed on Wednesday.
That compares to March data, which showed prices had lifted 3.6 per cent over the previous 12 months.
The Reserve Bank’s preferred measure of inflation — trimmed mean — was down slightly to 3.9 per cent in the year to June.
“This is the sixth quarter in a row of lower annual trimmed mean inflation, down from the peak of 6.8 per cent in the December 2022 quarter,” the bureau said.
The likelihood of an August rate hike lifted marginally over the past week according to Bloomberg data, shifting from a 22 per cent chance to 31 per cent.
A strong jobs market and higher-than-expected monthly inflation data in recent weeks sparked concerns that the Reserve Bank was starting to fall behind in the battle against inflation. That would prompt at least one more rate hike.
The central bank targets an inflation rate between 2 to 3 per cent. A higher level leads to living standards going backwards and adds to inequality.
Judo Bank chief economic adviser Warren Hogan said on Monday that most analysts reckoned a quarterly rise of more than 1.1 per cent — roughly 4.1 per cent across the year — would force the RBA to raise rates.
But he said many felt a quarterly rate of one per cent was enough.
ANZ had predicted headline and trimmed mean inflation — the bank’s preferred measure because the data strips out volatility — would both run at 3.9 per cent. The bank said an “uncomfortable” rate would be 4.1 per cent.
More to come