RBA hikes the Cash Rate by 25bps to 4.60%, as expected with the decision unanimous, while it stated inflation remains elevated and some of the upside risks in August are materialising

Says: Board will continue to take whatever action it considers necessary to return inflation sustainably to target, including raising the cash rate target further if required. Conflict in the Middle East has widened and global energy prices are now significantly higher than assumed in the August forecast. The three increases in the cash rate target since the start of the year have tightened financial conditions and the economy appears to be losing momentum. Inflation remains too high and the Board judged that, given recent developments, further tightening in financial conditions is warranted to support a return of inflation to target within a reasonable timeframe. Recent inflation outcomes in Australia were stronger than anticipated at the previous meeting. Monetary policy is well positioned to respond to developments, and the Board remains focused on its mandate of delivering price stability and full employment. Labour market conditions have eased broadly in line with expectations in recent months, while leading indicators for the labour market remain broadly steady. Since the previous meeting, some upside risks to inflation have started to materialise. There continues to be elevated uncertainties surrounding the outlook for domestic economic activity and inflation. Middle East conflict remains unresolved, with scenarios in which inflation is higher and economic activity is weaker than forecast.