A jump in global oil prices risks worsening the cost of living crunch and derailing the Reserve Bank’s current path to bring inflation to a heel, forcing another rate rise, meeting minutes reveal.
The threat of persistent price pressures led the RBA to consider a further 25 basis point hike to interest rates, bringing the official cash rate to 4.35 per cent, when the bank’s board met earlier this month for the first time with governor Michele Bullock in the top job.
Despite renewed cost pressures at the bowser, the central bank ultimately chose to keep rates on hold at 4.1 per cent for the fourth consecutive month in October, stating that the delayed impact of its interest rate increases would not be fully evident for some months. Economist are split between whether the RBA will make one final move higher or are finished raising rates this cycle, reinforcing the view that the cash rate will stay higher for longer than previously expected.
“Rising energy prices had seen headline inflation pick up in a number of countries over the prior couple of months, including in Australia,” the minutes read. Analysts fear that global oil prices could rebound past $US100 a barrel. Photo by CHANDAN KHANNA / AFP
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