Treasurer Jim Chalmers delivered the sobering pre-Christmas news after the Reserve Bank raised the official cash rate to 3.10 per cent - the highest level since 2012.

Reserve Bank governor Philip Lowe said the board expected to keep lifting interest rates as it tries to put the brakes on inflation, which is set to peak at 8 per cent this year.

Surging energy prices are one of the major factors fuelling the inflation rate, with the federal government still weighing up options to intervene in the market.

Dr Chalmers has reaffirmed a plan designed to take the "sting" out of forecast gas and electricity price rises would be in place before Christmas, allaying fears Prime Minister Anthony Albanese's bout with COVID-19 would cause delays.

Mr Albanese will convene a virtual meeting of national cabinet to discuss the energy market intervention on Friday, after his positive test ruined plans for in-person talks with premiers and chief ministers on Wednesday.

The pressure on the federal government, states and territories to agree on a plan to ease pressure on households and businesses has intensified after the Reserve Bank's rates ruling.

The 25 basis point rate increase means Canberra homeowners would need to fork out an extra $126 each month to cover mortgage repayments, if the rise is passed on by the banks in full, according to calculations from website Canstar.

The calculation is based on the current median house value in Canberra of $987,450.

In a statement following Tuesday's board meeting, Dr Lowe said the "substantial cumulative increase in interest rates" was necessary to contain inflation.

"High inflation damages our economy and makes life more difficult for people," Dr Lowe said.

"The board's priority is to re-establish low inflation and return inflation to the 2-3 per cent range over time."

The latest decision came after the board's under-fire governor last week apologised to Australians who had taken out mortgages after the central bank had predicted rates wouldn't rise until 2024.

Dr Lowe' statement on Tuesday said Australia's strong economic growth was expected to "moderate" in the coming year amid a global slowdown.

Household spending were also expected to ease as the full force of the rate rises was felt.

Dr Chalmers said the consecutive interest rate rises were having "harsh and heavy consequences" for mortgage holders.

But he warned the worst was yet to come.

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"As the RBA made clear today, we expect the full impact of these rate rises will be felt down the track," he said.

With so many factors, including the war in Ukraine, outside of its control, Dr Chalmers said the government was focused on where it could "meaningful" differences.

That includes launching a temporary intervention to bring down gas and electricity prices, which the October budget forecast would rise 44 per cent and 56 per cent respectively through to the end of 2023.

Dr Chalmers said all options remained on the table, with a price cap on gas firming as one part of the solution.

He left the door open for the federal government to compensate the states and territories for measures which might hurt their budget bottom lines.

"High prices for our commodities are helping the budget a bit, but they are hurting the economy a lot," Dr Chalmers said.

"They are hurting our industries, they are hurting our families and households right around Australia. So we have a responsibility to act."

Shadow Treasurer Angus Taylor said Labor got elected promising cheaper mortgages, cheaper electricity and lower cost of living but, instead, "what we've seen is the exact opposite".

Mr Taylor attacked the Albanese government for wasting six months and, he claimed, leaving the Reserve Bank to carry a "heavy can" to deal with inflation.

He said the Coalition would, if in government, get more pensioners into the labour market and attempt to get more gas into the domestic network.

"It is a very simple formula. It's worked in the past," he said.