Increasing inflation and a “hawkish” approach to reducing it could lead to the first interest rate rise in more than two years, economists say.
It comes after inflation jumped on Wednesday, with the big four banks — Commonwealth, Westpac, NAB and ANZ — now all predicting a rate hike when the Reserve Bank of Australia’s (RBA) monetary policy board convenes for its first meeting of the year on Tuesday.
The latest figures from the Australian Bureau of Statistics (ABS) showed headline inflation rose to 3.8 per cent in the year to December, up from 3.4 per cent in November. Meanwhile, the trimmed mean — which strips out volatile items — also edged higher to 3.3 per cent from 3.2 per cent.
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