‘Live’ chance of interest rate hike at March RBA meeting amid oil price spikes affecting inflation, governor says

‘Live’ chance of interest rate hike at March RBA meeting amid oil price spikes affecting inflation, governor says Michele Bullock not ‘making a prediction’, but cites rise in oil prices due to attacks on Iran and tight labour market as factors in possible cash rate rise Follow our Australia news live blog for latest updates Get our breaking news email , free app or daily news podcast The governor of the Reserve Bank of Australia , Michele Bullock, says there is a “live” chance of a rate hike in two weeks’ time, as the central bank frets that a “prolonged” oil price spike as a result of the attacks on Iran will make it harder to bring inflation under control. Investors and economists had largely discounted the chance of a move at the upcoming board meeting on 16-17 March, believing that the RBA would wait for the next quarterly inflation report before a likely hike in May. But Bullock, in unusually forthright comments, said a back-to-back rate rise was on the cards given “elevated” inflation and a tight labour market. “I’m not making a prediction about March, but it will be a live meeting,” she said. “We have inflation at 3.8% headline, and we have unemployment at 4.1; [that’s] tight. “The board will be actively looking at whether or not it needs to move more quickly. So I would discourage people from thinking that we necessarily only meet every quarter.” The RBA board lifted its cash rate to 3.85% at its February meeting in response to a surprise inflationary surge through the second half of last year. Sign up: AU Breaking News email Financial markets pricing showed the chance of a hike on 17 March jumped from near zero to higher than 25% after the governor’s comments, Bloomberg reported, although bets remained on the following meeting in May as the most likely timing for another move. “The board’s strategy has been to try and bring inflation down to target in a reasonable time frame while preserving the gains in employment,” Bullock said. “But it does beg the quest...