Sydney, Jun 21 (IANS): Reserve Bank of Australia (RBA) Governor Philip Lowe on Tuesday pushed back against fears that the country is heading towards a recession due to rising inflation and cost of living pressures.

Speaking to the American Chamber of Commerce in Australia (AMCHAM) in Sydney, Lowe acknowledged that his country, like many other nations, was experiencing the highest rates of inflation in many years, reports Xinhua news agency.

"The fact that inflation is higher everywhere tells us that there are powerful global factors at work."

He said that while interest rate increases were putting pressure on Australian households, strong demand in the labour market and historically low rates of unemployment, under 4 per cent, indicated a strong buttress to a recessionary economy.

"Our fundamentals are strong and the position of the household sector is strong and firms are willing to hire people at record rates. It doesn't feel like the precursor to a recession, and interest rates are still low."

He said the bank was prepared to do "whatever it takes" to bring down inflation, but said that it is unlikely that interest rates would pass 4 per cent by the end of the year.

In an effort to quell inflation, the bank already lifted interest rates by 25 basis points in May and 50 basis points this month.

Lowe said that the board would discuss lifting rates by either 0.25 or 0.5 percentage points in their next monetary board meeting in July.

The RBA expects inflation to peak at 7 per cent in the December 2022 quarter, and to return to the 2 to 3 per cent target range in the next couple of years.