The chief of Australia’s central bank has cautioned that inflation is poised to climb far faster than projected only a month ago and that policy must respond “decisively,” which is why the bank issued an unexpected rate hike in early June.
Inflation in Australia is likely to reach 7% by the end of the year, from the current 5.1% pace.
That was up sharply from a previous forecast of 5.9%. It would be the highest reading since mid-1990 and far above the RBA’s long-term target range of 2-3%. Governor Philip Lowe made it clear there was more tightening to come.