RBA Hawks Gain Ammo as Inflation Surges to 4%

The Reserve Bank of Australia's (RBA) preferred measure of inflation remained steady at 3.6%, but the headline rate rose from 3.5% to 4% in the year to August, driven by soaring housing costs and petrol prices.

Housing costs accounted for a third of the increase, with electricity bills jumping 13.2% over the year and new home prices rising 5.7%. Transport was the second-largest contributor, up 5.6% due to sharp increases in fuel prices.

The RBA's latest rate hike, which took the cash rate to a 15-year high of 4.6%, may not be enough to curb inflation, according to some economists. Peter Jolly, a former NAB global head of research, said history favours more tightening, predicting one more rate hike in November.