Bullock Warns of Further Rate Hikes Amid Ongoing Oil Price Volatility

Reserve Bank governor Michele Bullock warned that inflation remains too high and may require further interest rate hikes to control. The Middle East oil crisis is exacerbating price pressures, with global benchmark Brent crude fluctuating near $US90 a barrel.

In a speech on Tuesday, Ms Bullock said the underlying inflation had evolved broadly as expected since May but still requires attention. She noted that three rate rises since February have eased the labour market and moderated demand growth, but further easing is needed to bring inflation sustainably back to target.

The RBA governor emphasized that the board will act as required to achieve its mandate, including increasing the cash rate if necessary. The Australian Bureau of Statistics is set to release trimmed mean inflation figures on Wednesday, which could influence the Reserve Bank's next rates decision on August 11.