Sydney: Rising consumer prices delivered a fresh blow to embattled Australian Prime Minister John Howard's re-election bid today by threatening to force up interest rates for crucial mortgage-belt voters.

Economists predicted the central bank would hike rates at its next board meeting on November 6,just days ahead of the November 24 election in which the veteran premier is fighting for his political life.

With mortgage holders already hit by five rises since Howard won the last election in 2004 on a pledge to keep interest rates low, a new increase would be very bad news for the government.

At 6.5 percent the Reserve Bank's official cash rate is the highest it has been since Howard's conservative Liberal-National coalition came to office 11 years ago.

The centre-left Labour Party, which already holds a commanding lead in the opinion polls, has made interest rates a central campaign issue and seized on the latest inflation figures.

"The government is failing to fight effectively against the inflation threat to the economy and those paying the price for this are working families on home mortgages," party leader Kevin Rudd told a news conference.

"Those home mortgages are causing great stress." Official figures released today showed crucial measures of underlying inflation rose by 1.0 percent in the third quarter for a total of 3.0 percent over the past year -- the top end of the Reserve Bank's target band.

ANZ head of markets research Warren Hogan said the data meant a hike in rates next month was inevitable. 

Source : PTI