Oil Prices Fuel Inflation Fears as RBA Prepares Rate Hike

RBA Governor Michele Bullock warned of sharply increased oil prices due to the Iran war, which will add directly to inflation.

The Reserve Bank is now likely to raise interest rates in September, with economists at one of Australia's big four banks predicting a hike.

Bullock told a parliamentary hearing that inflation was worse than expected and some upside risks were materializing.

The Iran war has pushed up energy prices, while the AI boom is also driving up demand and putting pressure on inflation.