Inflation is expected to keep lifting towards its forecast peak as supply chain bottlenecks, high energy prices and expensive freight drive up the cost of living.

The latest consumer price index figures due to be released by the national statistics bureau on Wednesday follow the Albanese government’s first budget, which was broadly applauded for not pumping more stimulus into the economy and driving inflation higher.

Headline inflation hit 6.1 per cent in annual terms in the June quarter and is expected to peak at 7.75 per cent.

The latest round of floods are expected to keep inflation hovering around its peak for longer as soaring energy prices also take their toll.

Treasury expects the floods in Tasmania, NSW and Victoria to push fruit and vegetable prices up by 8 per cent over the next two quarters.

The Australian Bureau of Statistics’ new and experimental monthly consumer price index indicator saw headline inflation lifting 7 per cent in the year to July and 6.8 per cent to August.

St George economists expect to see inflation hit 1.1 per cent over the quarter and 6.5 per cent annually in September, with the trimmed figure tipped to lift by 1.5 per cent for the quarter and 5.6 per cent annually.

Quarterly inflation will be watched carefully by the Reserve Bank of Australia ahead of its November interest rate decision.

“If inflation comes in higher than expected, it will place additional pressure on the RBA to continue hiking the cash rate,” St George economist Pat Bustamante said.

“This will be particularly the case if the stronger read is due to higher wages.”

The ABS will release September CPI figures on Wednesday.

– AAP