CANBERRA, Australia (AP) — Australia’s central bank lifted its benchmark interest rate Tuesday for the first time since June with a quarter percentage point hike that brought the cash rate to a 12-year high of 4.35%.

The Reserve Bank of Australia’s hike, its 13th since May 2022, was widely expected after the nation’s inflation for the September quarter was higher than expected at 1.2%, or 5.4% for the year, driven mainly by the price of gasoline.

The last time the cash rate was higher was in December 2011, when it was 4.5%.

Bank Governor Michele Bullock said progress in reducing inflation had been slower than expected.

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“Inflation in Australia has passed its peak but is still too high and is proving more persistent than expected a few months ago,” Bullock said in a statement.

The bank manipulates interest rates to keep inflation within a target band of between 2% and 3%.

Bullock said her board did not expect inflation to fall within that range until late 2025. She has not ruled out a further rate rise.

“Returning inflation to target within a reasonable timeframe remains the board’s priority,” she said.

Treasurer Jim Chalmers declined to comment on the likelihood of the bank increasing rates again at its next monthly board meeting on Dec. 5.

“I leave it to the economists and to the market to make their own predictions. I don’t predict or pre-empt or second-guess decisions taken by the independent Reserve Bank board. That is a matter for them,” Chalmers told reporters.

He said his government policies, including balancing the nation’s books in the last fiscal year for the first time in 15 years, were containing inflation while providing cost-of-living help to the most needy.

“The government is doing its bit to address the inflationary pressures in our economy. The independent Reserve Bank has taken this decision today in the interests of this fight against inflation,” Chalmers said.

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