Reserve Bank lifts rates amid inflation concerns

The Reserve Bank has raised interest rates for the second time this year, lifting the official cash rate to 4.1% following a narrow five-to-four board vote. Reserve Bank Governor Michelle Bullock indicates a recession may be necessary to reduce inflation, which currently sits at 3.8%, with concerns about rising fuel prices due to conflict in Iran affecting the economic outlook. Treasurer Jim Chalmers has announced the upcoming budget will focus on tackling inflation, productivity and returning the budget to balance, while the big four banks have passed on the rate hike to mortgage holders but not fully to savings account holders.

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