Inflation risks building as RBA weighs up appetite for more hikes

Inflation is likely to continue running hot into the end of the year, with the Reserve Bank issuing a warning on the likely path for interest rates as it prepares to make a decision in two weeks’ time.As the Middle East conflict continues to impact on inflation across the globe, Reserve Bank assistant governor Sarah Hunter has said the lack of a resolution between the United States and Iran is leaving Aussies increasingly vulnerable to higher prices.Speaking at the Regional Australia Institute on Monday, Dr Hunter said inflation risks were still skewed to the upside, meaning inflation is likely be higher than expected.Dr Hunter said a failure for a peace deal in the Middle East meant petrol and diesel costs in particular will continue to rise, with households and businesses feeling the flow on strongly.The government has been under pressure to rethink the recently removed fuel excise discounts after tensions in the Strait of Hormuz saw oil return to above USD$100 per barrel last week.Oil tankers in the Strait of Hormuz. PictureThe mounting effects of the conflict are expected to see the Federal Reserve raise interest rates in the US on Wednesday for the first time in three years – ...