Key facts
- The RBA has kept inflation outside its 2-3% target range for six years.
- Governor Michele Bullock expressed concern that businesses may start lifting prices due to persistent Middle East conflict.
- Economists anticipate another RBA rate hike in six weeks, with financial markets pricing in a 50% chance of a further increase next year.
- Bullock warned that aggressive action to curb inflation could lead to a 'dramatic slowdown' of the economy.
The Reserve Bank of Australia (RBA) is facing increased difficulty in its battle against inflation, with the ongoing conflict in the Middle East posing a significant threat to the central bank's efforts. RBA Governor Michele Bullock stated on Tuesday that the conflict, which was initially expected to be short-lived, has persisted and led to what she described as 'permanently higher' fuel, fertilizer, and transport prices.