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RBA warns further rate hikes if inflation risks materialize

RBA Deputy Governor Andrew Hauser pointed to fuel-cost risks tied to the Middle East and domestic capacity pressures as sources of upside inflation concern.

Reported · Written up by our desk · Central Banks

BNY, citing comments from Reserve Bank of Australia Deputy Governor Andrew Hauser, said the RBA remains concerned about upside inflation risks even after leaving the cash rate unchanged at its latest meeting. Hauser said further rate hikes cannot be ruled out if inflation does not keep falling and those risks materialize, according to FXStreet.

Hauser attributed the inflation concern to external pressures from Middle East-driven fuel costs and domestic capacity pressures, as well as weak productivity and limited growth prospects. The RBA warning implies it will reassess policy if the inflation outlook worsens beyond expectations, FXStreet said.

FXStreet also highlighted that Australia’s wage data showed the June quarter 2026 Wage Price Index rose 0.8% quarter over quarter for a fifth straight quarter, lifting annual wage growth to 3.2% year over year. Private-sector wages increased 0.7% quarter over quarter and 3.1% year over year, while public-sector wages rose 0.9% quarter over quarter and 3.4% year over year.

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