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RBA Governor Bullock Highlights Rising Inflation Risks Ahead of Upcoming Meeting
Reserve Bank of Australia (RBA) Governor Michele Bullock has indicated that inflation risks previously identified in August are now becoming evident, particularly due to the ongoing conflict in the Middle East. During her testimony to the House of Representatives Standing Committee on Economics, Bullock noted that inflation has remained above the target level since the second half of 2025, with both headline and underlying measures hovering around or slightly above 3.5% over the past year. She emphasized that rising oil prices are contributing directly to inflation through increased petrol costs and indirectly as businesses pass on higher input costs to consumers.
Bullock pointed out that the current unemployment rate stands at 4.5%, which is low by historical standards, and that the employment-to-population ratio is near a record high. However, she acknowledged that domestic demand growth is slowing, with the full impact of this year's cumulative 75 basis points of interest rate increases yet to be felt. Despite this, business investment has seen a strong uptick, particularly in data centers and renewable energy sectors.
The RBA's next meeting is scheduled for September 28-29, where the Board will evaluate whether the monetary tightening implemented so far is adequate to bring inflation back to target levels in a reasonable timeframe. Bullock's remarks suggest a hawkish stance, as she highlighted that other advanced-economy central banks are also responding to similar global inflation pressures, reinforcing the likelihood of further rate hikes.
Source: KLEA News