RBA Hints at September Rate Hike Amid Inflation Concerns

RBA Governor Michele Bullock has signaled that the central bank may raise interest rates in September as inflation concerns grow. In a parliamentary hearing, Ms. Bullock stated that some upside risks to inflation are materializing, despite slowing economic growth.

The Iran war is driving up oil prices, which will add directly to inflation, according to Ms. Bullock. Brent crude prices have remained above $US104 a barrel following attacks on Saudi Arabian oil infrastructure.

Economists at Westpac now expect the RBA to raise interest rates in September, with another hike expected by March. The AI boom has pushed up demand in a way that was not foreseen by the central bank.