Australia's central bank lifts rates to 15-year high, signals risk of further hikes

According to Business Recorder, the Reserve Bank of Australia lifted its cash rate on Tuesday to 4.60%, the highest level in 15 years and its fourth increase this year. The central bank said inflation remained too high and that it was ready to raise rates again if needed. The move had been widely expected, and the Australian dollar barely shifted from $0.7014.

The board voted unanimously for a 25 basis point hike, which brings the year's total increase to 100 basis points. It cited renewed disruption to global oil supply and data showing growth and inflation running above expectations. Markets now put a 43% probability on another rise in November.

Brent crude is up almost 20% since the August meeting, threatening wider price pressures. Headline inflation for August is forecast to rise to 4.1%, well above the central bank's 2% to 3% target band, while underlying inflation is likely to stay at 3.6%, according to data due Wednesday. Oxford Economics Australia's head of research said early hopes of moderate pass-through from firms to households have faded, with underlying inflation now moving higher.