RBA Warns Inflation Risks Skewed to Upside Ahead of Interest Rate Decision

The Reserve Bank of Australia's chief economist, Sarah Hunter, has warned that rising inflation pressures could lead to another interest rate hike. The bank is concerned about higher petrol and diesel costs flowing through to households and businesses, as well as the broader global environment being more inflationary.

One factor contributing to the price increases is the scramble for tech components due to the AI boom. Dr. Hunter pointed out that the recent surge in prices of consumer electronics, such as Apple's latest iPhone model, is directly related to the high demand for these chips.

The escalating conflict in the Middle East has also pushed up oil prices, which broke the $US100 a barrel barrier last week. The Reserve Bank governor Michele Bullock has previously stated that the board might have to raise interest rates further if upside risks to inflation materialised.