RBA Expected to Raise Interest Rates Again

The Reserve Bank of Australia (RBA) is expected to raise interest rates for the fourth time this year on Tuesday, with all major financial institutions agreeing that a rate hike is inevitable.

The big four banks and financial markets have priced in an 80 to 90 percent probability of a 25 basis point increase, pushing the cash rate from 4.35 percent to 4.6 percent, its highest level since 2011.

ANZ economists note that the RBA no longer views recent energy price spikes as a temporary blip, but as a broader, long-term inflationary risk they want to suppress.

The prolonged conflict in the Middle East has pushed Brent crude oil prices to their highest level in months, which will add to domestic demand and GDP growth.