RBA Keeps Cash Rate Hike in Focus with Stubborn Inflation

The Reserve Bank of Australia (RBA) increased the cash rate to a near 15-year high of 4.6% on Tuesday, marking the year's fourth hike in eight months.

The decision was unanimous, with members citing growing concerns around AI investment, the continuation of the Iran War, and domestic capacity concerns as key pressure points.

However, new data released by the Australian Bureau of Statistics (ABS) on Wednesday showed underlying inflation remained at 3.6% in the 12 months to August, marking the third month in a row without any cooling.

This has strengthened the chance of another rate hike in November, with economists predicting that the RBA may need to take further action to control inflation.

Rachael McCririck, head of price statistics at the ABS, confirmed that both electricity costs and fuel prices were removed from the August calculation, which instead show up in the headline inflation number.