RBA Flags Possible Further Rate Rises as Inflation Remains Too High

The Reserve Bank of Australia (RBA) has warned that further interest rate hikes may be needed to control inflation, which remains 'too high.'

RBA governor Michele Bullock said underlying inflation had evolved broadly as expected since May but remained above target.

Bullock noted that the labour market had eased somewhat and demand growth was moderating after three rate rises since February. However, she stated that further easing in demand is needed to bring inflation sustainably back to target.

The warning comes amid ongoing oil market volatility, with Brent crude falling below US$90 a barrel on Tuesday. The Middle East crisis has led to increased prices, which the RBA believes will remain elevated in the short term.