RBA's Hawkish Stance Firm as Inflation Beats Forecasts

Australia's inflation rate rose to 3.5% in the 12 months to July, higher than the 3.2-3.3% range predicted by economists.

The Consumer Price Index (CPI) eased from 3.8% in June, but the result still surpasses expectations, reinforcing the Reserve Bank of Australia's (RBA) stance that a rate cut is not imminent.

Housing was the largest contributor to annual inflation, driven by higher costs for materials and labor, while food and non-alcoholic beverages rose 3.2%, led by a 4.5% increase in meals out and takeaway prices.

RBA deputy governor Andrew Hauser warned that the global AI investment boom poses an upside risk to inflation, and if it materializes, the central bank will consider raising interest rates again.