The Reserve Bank increased the cash rate for a fourth consecutive month at its August meeting, by 0.50 percentage points, as it continued its fight against surging inflation.

Reserve Bank governor Philip Lowe foreshadowed further cash rate increases.

"The increase in interest rates over recent months has been required to bring inflation back to target and to create a more sustainable balance of demand and supply in the Australian economy," Dr Lowe said.

"The size and timing of future interest rate increases will be guided by the incoming data and the board's assessment of the outlook for inflation and the labour market.

"The board is committed to doing what is necessary to ensure that inflation in Australia returns to target over time."

The Reserve is forecasting annual inflation will not return to its 2-3 per cent target band until late 2024.

Home loan borrowers can expect further squeezing in the meantime.

The big four banks, Tasmanian-based MyState Bank and Bank of us and Bendigo and Adelaide Bank all passed on the latest hike in full to variable rate home loan borrowers, with most also boosting customer returns from selected savings products.

MyState Bank managing director and chief executive Brett Morgan said many customers were looking for advice on preparing for the months ahead.

"It could be a case of making small changes now, such as forgoing a night out and cooking at home, cancelling some lockdown entertainment luxuries and even looking for better deals on purchases," he said.

"Over the past month, our customer contact centre conversations are not just about interest rates, but also about cost of living pressures.

"For any customers concerned about their ability to meet upcoming loan repayments, we strongly encourage they get in contact with us as early as possible, as there are ways we can help out."

Economist Saul Eslake said the August cash rate hike to 1.85 per cent took the cumulative increase since the first hike in May to 175 basis points.

He said that was the sharpest increase in interest rates since the second half of 1994.