New inflation figures to indicate where the RBA will go with interest rates next week

The June quarter inflation data will be released on Wednesday morning, giving pundits a clearer idea of whether the RBA will seek to hike rates next week.

Aussie households are sweating on new inflation figures to be released on Wednesday morning which could determine where the Reserve Bank goes on interest rates next week.

They’ve already been warned the consumer price index for the June quarter is likely to be stubbornly higher than what the government or the RBA wants, which could mean a hike in the 4.35 per cent rate.

The CPI figure for the March quarter was 3.6 per cent, less than half its peak and much lower than the 6.1 per cent before the Albanese government was elected in May 2022.

But it is still well above the RBA target range of between 2 and 3 per cent.

Monthly CPI figures, while more volatile, have put a scare into mortgage holders by being hotter than expected.

RBA graph showing progress of inflation versus the Reserve Bank's target range of 2-3 per cent. Picture: Supplied

The RBA, which will announce its rates decision on Tuesday, has consistently said it would be willing to raise rates for a 14th time since May 2022 if necessary to bring down inflation.

But that would mean more pain for households who are already suffering under cost of living pressures with the impact of the July 1 stage three tax cuts and new benefits still to flow through.

Treasurer Jim Chalmers again on Wednesday would the figures would likely show “persistent” price pressures in the economy.

Prime Minister Anthony Albanese and Treasurer, Jim Chalmers are hoping inflation will moderate further as the government prepares for an election. Picture: NewsWire / Martin Ollman

“I think most economists expect the inflation figures today to be persistent, sticky and stubborn in unwelcome but unsurprising ways,” Mr Chalmers told Sky News.

He said pressures were coming from global issues, but also domestic factors including ‘temporary’ issues around fruit and vegetables and travel costs.

“So we are anticipating inflation was pretty persistent in that June quarter.”

But he would not comment on on what action on rates he thought the RBA would or should take next week.

The Albanese government, which is readying for a federal election by May, is hoping for inflation to come down, reducing the pressure on the RBA to increase the cash rate.

The treasurer said he was confident prices would continue to “moderate” after Wednesday’s reading and come down over time.

Reserve Bank Governor Michele Bullock will announced the board’s rate decision on Tuesday. Picture: NewsWire / Nikki Short

Fears of another rate hike and the negative flow-on effect on economic activity have escalated following a hotter-than-expected inflation print on June 2, with the all-important number jumping up to 4 per cent in the year to May, up from 3.6 per cent in April.

The CPI figures will also be released alongside retail trade figures at 11.30am on Wednesday.

RBA governor Michele Bullock will then announce the outcome of the cash rate at 2.30pm next Tuesday, following the board’s meeting.