Expectations grow for interest rate hike next week after Australia’s inflation jumps to 3.8%

Inflation rose to 3.8% in the year to December, latest figures from the ABS showed, adding to the chance that the Reserve Bank will hike the cash rate. Photograph: Dan Peled/AAP

Inflation jumped to 3.8% in the year to December, from 3.4% in the month before, as strong underlying price growth added to the chance of a Reserve Bank rate hike next Tuesday.

The latest figures from the Australian Bureau of Statistics suggested that Australian households once again face a fight to bring rapidly rising consumer prices back under control.