RBA Confronts Inflation Fears with Fourth Rate Hike Looming

Australia's inflation rate remained higher than expected in July, fueling concerns that the Reserve Bank of Australia (RBA) may need to deliver a fourth interest rate hike this year.

The Australian Bureau of Statistics reported that consumer prices climbed 3.5% through the year to July, down from 3.8% in the previous month but above the 3.3% annual rate economists had forecast.

The RBA's preferred underlying inflation measure, which strips out volatile price swings, remained stuck at 3.6%, adding to worries about the path of monetary policy.

Economists are now scrambling to revise their forecasts, with analysts at National Australia Bank declaring that their call for no further hikes was 'under review' and Phil O'Donaghoe, chief economist at Deutsche Bank, expecting the RBA to move as early as its next meeting in September.