RBA Warns of Inflation Risks Amid Oil Price Spike and AI Boom

Reserve Bank of Australia (RBA) governor Michele Bullock has warned that upside risks to inflation are materialising, which may necessitate another interest rate hike despite a slowing Australian economy.

The RBA has already increased the cash rate by 75 basis points this year to 4.35%, with inflation remaining above the central bank's 2-3% target range.

Bullock cited higher oil prices, the Middle East conflict, and the global artificial intelligence investment boom as adding to inflation pressures.

The RBA's latest forecasts had identified inflation risks skewed to the upside, but Bullock said developments since the August meeting indicated some of those risks are becoming reality.