RBA Set to Hike Cash Rate to 4.6% Amid Inflation Concerns
The Reserve Bank of Australia (RBA) is widely expected to increase the cash rate to 4.6 per cent on Tuesday, a move that would represent the highest benchmark borrowing rate since November 2011.
Money markets have almost fully priced in a September hike, following unexpectedly hot inflation figures and rising oil prices.
The RBA's governor Michele Bullock has spoken about shifting priorities, with a focus on bringing inflation down, even at the expense of jobs. Recent speaking engagements suggest the bank's leadership is losing patience with getting inflation back to target.
Morgan Stanley's Australia economist Chris Read expects the board to vote unanimously in favour of a hike, while Commonwealth Bank senior economist Trent Saunders anticipates annual headline inflation to lift from 3.5 to four per cent, reflecting a spike in fuel prices.