Bullock Warns of Inflation Risks Ahead of Reserve Bank Interest Rate Decision

Reserve Bank of Australia Governor Michele Bullock issued a blunt warning on September 18 that inflation in Australia is too high, just days before the bank's board will consider lifting interest rates for the fourth time this year.

In addressing a House of Representatives Economics committee, Bullock attributed rising prices to several factors, including the Middle East conflict, the AI boom, and extreme weather events.

'Inflation is too high,' she said. 'We are focused on getting it back down and making sure that it does not become embedded into price and wage-setting decisions.'

Bullock warned that a prolonged period of elevated fuel prices caused by war is having a significant impact, with oil and related prices increasing sharply again.

She also highlighted the inflationary pressure exerted by the boom in AI-related infrastructure, including data centre construction, which is driving up demand for labor and prices for some technologies.