THE door has remained wide open for another interest rate rise, as economists predict what most mortgage-holders have feared tighter pressure on household budgets.

Caused by an increase in consumer spending, the latest inflation figures, released last week, have soared to dangerous heights.

For the first time in almost seven years, inflation is now at 4.2percent which is already above the Reserve Bank of Australia [RBA] target of between 2percent and 3percent.

The cash rate is sitting on 7.25percent, a 12 year high that has pushed banks to raise their own borrowing fees independently of the RBA.

Figures from the Australian Bureau of Statistics [ABS] showed the consumer price index [CPI] grew by 1.3percent in the March quarter this year up from 3percent in the year to December.

This was the biggest leap in quarterly inflation since June two years ago and took it to its highest level since 1995.

Petrol held the number one spot as the commodity that increased in price the most: almost 19percent from January to March to reach record highs of almost $1.60 a litre in some parts of Sydney.

Food finished in second place, with 10percent price rises on items including milk and vegetables.

Rents and property prices experienced combined price growths of 7.1percent and 5.7percent respectively, placing further strain strain on family budgets and increasing the housing affordability crisis.

Following last month's interest rate rise, RBA governor Glenn Stevens said inflation remained a ``major concern''despite a stronger economy, higher employment figures and slower demand for credit. He added that levels should decline ``over time'' if demand slowed.

The outcome of a possible rate rise will be announced when the RBA board meets on May 6.