RBA Puts Brakes on Economy with Imminent Rate Hike Amid Inflation Fears

The Reserve Bank of Australia (RBA) is likely to raise interest rates in September due to increased inflation fears, according to RBA Governor Michele Bullock. In a parliamentary hearing, Bullock stated that inflation risks have materialized, and the bank needs to get inflation back down to prevent worse outcomes.

One of the main contributors to the rising inflation is the ongoing conflict in the Middle East, which has pushed up oil prices. Brent crude prices are above $US104 a barrel, with some economists predicting they could rise as high as $US150 a barrel due to dwindling global oil supplies.

Businesses are starting to pass on higher costs to consumers, which risks entrenching inflation. The RBA's hawkish stance has been consistent in recent appearances by top officials, convincing economists and traders that the bank is determined to control inflation even at the expense of jobs.