Australian inflation rose to 4 per cent in the year to August, above the Reserve Bank’s 2 to 3 per cent target, a day after it raised interest rates. The figures reinforce concerns that price pressures remain persistent and that households with mortgages may face further increases in borrowing costs.

Housing was the biggest contributor to annual inflation, up 5.7 per cent, while transport rose 5.6 per cent; fuel prices jumped 14.8 per cent in August, partly as government excise relief ended. The Reserve Bank lifted its cash rate by 0.25 percentage points to 4.6 per cent, the highest since 2011 and the fourth increase this year. Governor Michele Bullock said another rise before Christmas was possible if further economic shocks hit; the bank’s next meeting is in November.