Australia’s inflation rate has soared to its highest level since the GST was introduced, laying the foundation for what Neil Mitchell says is an “inevitable” interest rates rise next week.

The figure has jumped from 3.5 per cent to 5.1 per cent – the highest in more than 20 years.

It’s been largely driven by higher petrol prices and housing costs.

“In my view, it makes an increase in interest rates inevitable next week,” Neil Mitchell said in response to the news on Wednesday.

“It must be announced next week.

“They can’t hold off until the end of the election, because if they do it looks like they’re being influenced by political considerations.”

Shane Oliver, chief economist at AMP, said it was hard to disagree with that view.

“The Reserve Bank, I think, has very little choice,” he said.

He broke down the figures on 3AW.

Press PLAY below to hear his views

Picture: Getty iStock