RBA Unfazed by Jump in Unemployment Ahead of Rate Hike

The Reserve Bank of Australia's (RBA) decision to raise interest rates next week is unlikely to be derailed by the recent jump in unemployment, which reached its highest mark in nearly five years.

The jobless rate rose to 4.6 per cent in August, up from 4.5 per cent in July and a level not seen since November 2021, when the economy was recovering from COVID-19 lockdowns.

Despite the increase in unemployment, commonwealth banks are still predicting that the RBA will hike its benchmark cash rate for the fourth time this year next Tuesday, with a 0.25 percentage point rise expected.

RBA governor Michele Bullock has repeatedly warned that inflation is too high, and with the current rate at 3.5 per cent, above the bank's target band of 2-3 per cent, further interest rate hikes are likely.