The Reserve Bank of Australia (RBA) is set to tighten its monetary policy in response to the country's inflation, which economists attribute to climate change, geopolitical shocks, and government policies. The bank has maintained an interest rate of 4.1% until its meeting on Monday, November 7, despite a series of rate hikes since May 2022 that have cumulatively added four percentage points due to housing-induced inflation.
Australia's housing market has been under notable pressure, with the eighth consecutive month of home price increases until October and record low rental vacancies. Last quarter's consumer price rise was significantly influenced by top drivers like housing costs, gasoline, and insurance.
Governor Michele Bullock has issued warnings against inflation exceeding the current late 2025 forecast. Money markets are now predicting a 70% chance of a rate lift to a 12-year-high of 4.35%.
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