Kevin Rudd admits record low rates are certain to increase after an inflation rise of 2.1%.
The inflation rate has economists tipping a fourth consecutive interest rate rise when the Reserve Bank meets next Tuesday.
Figures from the Australian Bureau of Statistics reveal headline inflation rose 0.5% in the three months to December, for an annual rate of 2.1%.
Mr. Rudd said interest rates would obviously rise again.
He said interest rates had dropped in the wake of the global financial crisis, but the government’s stimulus strategy had helped keep the economy going.
“Australia was the only advanced economy in 2009 not to go into recession,” he said.
JP Morgan economist Helen Kevans said borrowers should prepare for another rate rise.
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