RBA Set for Rate Hike Despite Surprise Unemployment Jump

The Reserve Bank of Australia (RBA) is likely to raise interest rates next week despite an unexpected increase in unemployment, according to economists. The jobless rate rose to 4.6% in August, its highest level in nearly five years.

This comes as the RBA's governor Michele Bullock has repeatedly warned that inflation remains too high at 3.5%. In fact, Bullock suggested earlier this week that an unemployment rate of up to 5% may be needed to bring inflation back within the target range.

All four major banks expect the Reserve Bank's Monetary Policy Board to hike its benchmark cash rate for the fourth time this year. The RBA's benchmark cash rate is currently at 4.35%, and another increase would lift it to its highest mark in 15 years.