Reserve Bank of Australia policy meeting preview: Bullock is expected to implement the first rate hike since taking office

　　A Bloomberg survey of economists showed most respondents expect the Reserve Bank of Australia (RBA) to raise interest rates to 4.35 per cent on Tuesday, as persistent inflation and broader economic resilience suggest further price restraint is needed to cool prices. It would be the first rate rise under new Governor Michel Bullock.

　　Economists point to recent unusually strong inflation and consumption data, while house prices rose for the eighth straight month, meaning inflation could accelerate further if no action is taken.

　　Josh Williamson, chief Australia economist at CitiGroup, said: "With current interest rates insufficient to dampen domestic demand growth, a 25 basis point hike may not solve the problem." The board could even discuss a possible 50 basis point rate hike, but given the extent of rate hikes and realpolitik at this point, we doubt that such a move will materialize."

　　James McIntyre, an economist at Bloomberg Economics, said: "The Reserve Bank of Australia faces a tough choice. Inflation expectations matter much more, and if the RBA judges that inflation expectations remain unchanged despite fuel prices pushing up the inflation index, then interest rates are expected to remain on hold. We think this is the result."

　　Michaela Fuchira, an economist at Bank of America, said: "Another 25 basis point rate hike in November would mean a further squeeze on household finances, meaning a soft landing is less likely." Given the current weak economic conditions, the scope for another rate hike later on is very limited."