September hike firms as RBA inflation fears come true

Australian firms are moving their expectations toward a rate hike after Reserve Bank of Australia governor Michele Bullock warned that inflation may be worse than previously forecast. Speaking to a parliamentary hearing in Canberra, Bullock said inflation appeared to be coming in above what the RBA expected at its August meeting, with upside risks materialising even as growth slows. Westpac’s chief economist Luci Ellis brought forward its predicted rate rise from November to September, citing the shift in conditions. Bullock’s remarks followed a series of hawkish signals from RBA officials suggesting the bank is prioritising inflation control despite job impacts. She pointed to pressure on energy, food and tech prices from the Iran war, the AI boom and a strong El Niño, with Brent above $US104 a barrel. Commonwealth Bank’s Vivek Dhar warned oil could reach $US150, noting shrinking inventories and rising demand risk.