RBA Interest Rate Decision Hinges on Inflation, Unemployment, Household Spending

The Reserve Bank of Australia (RBA) will make its next interest rates decision on Tuesday. The bank has already lifted rates three times this year, and governor Michele Bullock has refused to rule out further hikes as inflation remains above its 2-3 percent target band.

Bullock said that time is a factor in the battle with inflation because the longer it takes to get back down to target, the harder it becomes. The RBA will examine three key economic indicators: inflationary pressures, unemployment rate, and household spending.

The most recent data from the Australian Bureau of Statistics (ABS) showed a shift in inflation in June. Headline inflation fell from 4 percent to 3.8 percent, while the trimmed mean, which strips out volatile items, remained steady at 3.6 percent.