RBA Raises Interest Rates to Combat High Inflation Amid Ongoing Conflict

The Reserve Bank of Australia (RBA) has raised interest rates to their highest level since November 2011, aiming to combat high inflation. In a press conference, RBA Governor Michele Bullock acknowledged that this decision would be difficult for households with mortgages and businesses with loans.

Bullock emphasized the importance of bringing down inflation, citing its negative impact on vulnerable Australians. She noted that the conflict in the Middle East has exacerbated inflationary pressures, particularly in fuel, fertiliser, and transport prices.

The RBA's decision is based on the July consumer price index (CPI), which showed moderate inflation despite being above the target range of 2% to 3%. Bullock mentioned that many upside risks to inflation remain concerning, including capacity pressures and high demand.