RBA Set to Hike Interest Rates to Highest Level Since 2011

The Reserve Bank of Australia (RBA) is expected to raise interest rates to their highest level since November 2011, as inflation continues to rise. The RBA's board meeting on Tuesday will likely see a rate hike to 4.6 per cent, according to market expectations and economists.

This move would represent a significant shift in the RBA's approach, with Governor Michele Bullock and other officials indicating they are losing patience with above-target inflation. The bank's focus has shifted from maintaining full employment to bringing inflation back down, even at the expense of jobs.

Economists believe that this rate hike will have a ripple effect on the economy, potentially leading to more rate hikes in November and beyond. Commonwealth Bank senior economist Trent Saunders predicts annual headline inflation to lift to 4 per cent, with trimmed mean inflation unchanged at 3.6 per cent.