Middle East Conflict Drives Inflation Risks for Australians

Australia's Reserve Bank Governor Michele Bullock warned that the ongoing conflict in the Middle East is driving inflation risks and making Australians poorer.

The RBA's Monetary Policy Board, which Bullock chairs, will consider interest rates at its next meeting at the end of September. The board increased the cash rate target by 0.25 percentage points three times in the first six months of this year but kept the key interest rate on hold at 4.35 percent.

Bullock stated that the Middle East conflict has worsened the trade-off between inflation and employment, with a spike in oil prices expected to add directly to inflation. The RBA's target is to bring inflation back within the 2-3 percent band within a reasonable time.