Sky News Business Editor Ross Greenwood says there is “growing evidence” the Reserve Bank needs to raise interest rates to ensure inflation returns to the “target band” of two to three per cent by 2025.
Inflation rose 1.2 per cent in the September quarter which was higher than was forecast, increasing the risk of a Reserve Bank interest rate rise.
“Right now, with Australia’s cash rate being well below the inflation rate, there is serious justification to raise interest rates,” Mr Greenwood told Sky News Australia host Sharri Markson.
“There is growing evidence that this Reserve Bank, sad for mortgage holders, needs to raise interest rates higher to try and quell the inflation.”
The Reserve Bank will meet next Tuesday to decide whether to raise rates for the 13th time since May 2022.