RBA Faces Pressure to Hike Rates Amid Accelerating Inflation

Economists are warning that the Reserve Bank of Australia (RBA) may be too slow to respond to rising inflation pressures, prompting predictions of a significant interest rate hike in September.

The current cash rate is at 4.35 per cent, but modelling suggests it should be between 4.75 per cent and 5 per cent to combat inflation.

Core price pressures have accelerated rapidly, with the monthly trimmed mean measure jumping to an annualised pace of 4.7 per cent over the three months to July 2026.

The RBA's inflation target is 2.5 per cent, but recent figures are well above this mark, with a 10.4 per cent surge in consumer technology prices driven by artificial intelligence demand and global supply chain bottlenecks.