RBA Warns of Inflation Risks as Global Energy Prices Surge

The Reserve Bank of Australia (RBA) is expressing concerns over rising inflation pressures in the global economy, particularly in the Middle East. The central bank's chief economist, Sarah Hunter, spoke at a Regional Australia Institute summit in Canberra, where she noted that inflation risks are skewed to the upside due to higher petrol and diesel costs.

Hunter highlighted the impact of the escalating conflict in the Middle East on energy prices, which have broken the $US100 per barrel barrier. She also pointed out that the AI boom is driving up demand for tech components, leading to increased prices for consumer electronics, such as iPhones.

The Federal Government has not ruled out cutting the fuel excise again as petrol and diesel prices rise. Reserve Bank governor Michele Bullock has previously stated that the board might raise interest rates further if upside risks to inflation materialize.