RTTNews - A monthly inflation gauge for Australia rose at its fastest pace in seven years in July, a report by the TD Securities and Melbourne Institute showed Friday. This was mainly due to higher costs of communication, utilities and other housing related charges.

The gauge rose 0.9% in July, which is the steepest rise in the seven-year history of the survey. This comes after a 0.4% rise in June.

For the year ended July, the inflation gauge climbed 1.9%, falling just short of the Reserve Bank of Australia's target band of 2% to 3%, and signaling a possible end of interest rate cuts in the near future.

The latest inflation figures released by the statistical office showed that consumer prices climbed 1.5% year-on-year in the second quarter, slower than the 2.5% rise in the first quarter.

Sequentially, consumer prices were up 0.5% in the second quarter, faster than a 0.1% rise in the first quarter.

In its latest monetary policy meeting, the central bank held the interest rate at a 49-year low of 3% for the third consecutive month. The central bank had slashed interest rates by 125 basis points since December last year.

On the basis of the latest data, the TD Securities economist Annette Beacher indicated that the RBA would most certainly leave the rates steady at its next policy meeting on August 4.

Meanwhile, in an address to the Anika Foundation Luncheon in Sydney on July 28, the RBA governor Glenn Stevens indicated that the downturn in Australia may not turn out to be one of the more serious ones of the post-War era, in contrast to the experiences of so many other nations.

Stevens said we can much more easily imagine upside risks to the outlook, to balance out the downside ones, than was the case six months ago. At the same time, the Governor pointed out that the real challenge in the near term was to ensure ready availability and low cost of housing finance.

For comments and feedback: contact editorial@rttnews.com