Reserve Bank hints at further rate rise in November

Summarised from 2 outlets · 3 reports · Updated 13 Oct, 02:32 · Archive

The Reserve Bank has hinted it could raise interest rates to an 18-year high at its November meeting.

The Reserve Bank's monetary policy board has hinted it could raise interest rates further at its next meeting on 3 November. The minutes of the September 28-29 meeting, released on Tuesday, indicate another hike is possible that would take the cash rate to 4.85 per cent, the highest borrowing cost since December 2008.

Inflation in August remained above the Reserve Bank's 2-3 per cent target for the 13th consecutive month, with headline inflation rising to 4 per cent from 3.5 per cent in July. The board stated it would 'continue to do what it considered necessary to achieve that outcome, including increasing the cash rate target further if required'.

The board expressed particular concern about the Middle East conflict adding to inflationary pressures. Following Iranian militia-backed drone strikes on Saudi Arabia's East-West pipeline, global energy prices rose significantly. The minutes noted 'the risk of a re-escalation of the Middle East conflict had since crystallised', with ongoing disruptions to shipping, damage to refineries and low inventory levels contributing to higher energy costs. Futures markets regard an increase at the next meeting as having only a 27 per cent chance.

How it is being reported

• Reserve Bank hints at another interest rate rise in September meeting minutesThe minutes of the Reserve Bank’s last meeting have suggested another hike is possible on November 3, that would see borrowers paying the highest interest since 2008.Perth Now · 13 Oct, 02:04
• Reserve Bank hints at another interest rate rise in September meeting minutesThe minutes of the Reserve Bank’s last meeting have suggested another hike is possible on November 3, that would see borrowers paying the highest interest since 2008.The West Australian · 13 Oct, 02:04
• Reserve Bank hints at another interest rate rise in September meeting minutesThe minutes of the Reserve Bank’s last meeting have suggested another hike is possible on November 3, that would see borrowers paying the highest interest since 2008.The West Australian · 13 Oct, 02:04

In this story: Reserve Bank · Middle East · Saudi Arabia · Iran

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