Reserve Bank could raise interest rates as early as May after inflation climbs to 3.8%

Jim Chalmers previously said there would be no major policy announcements in the midyear budget but has now hinted at further electricity subsidies. Photograph: Jono Searle/AAP

The Reserve Bank of Australia could be forced to hike interest rates as early as May, economists say, after inflation climbed to 3.8% in the year to October, from 3.6% in the month before.

The latest bad news on cost of living was accompanied by a shocking 37% annual jump in power bills as generous state government subsidies rolled off, figures from the Australian Bureau of Statistics revealed.