Bullock Signals Fourth Rate Hike as Inflation Fears Materialise

Australian Reserve Bank Governor Michele Bullock has warned of a potential fourth rate hike this year as inflation fears 'materialise'.

Bullock made the comments to a parliamentary committee, stating that developments since the last board meeting in August suggest that some upside risks to inflation are materialising.

The Reserve Bank had previously forecast that the 3.5 per cent inflation rate would return to the midpoint of the target range by late 2027, but Bullock now believes this may not happen as expected.

Bullock pointed to global pressures such as the Middle East conflict and extreme weather events as contributing factors to rising costs, which are being passed onto customers by firms.

The Reserve Bank had previously stated that it would hike rates again if these risks materialised, and Bullock's comments suggest that this may now be a reality.