Bullock warns inflation will exceed August forecast
Reserve Bank of Australia (RBA) Governor Michele Bullock said inflation will be higher than forecast in August as global costs compound domestic capacity pressures. The cash rate target has risen 100 basis points this year.
Price pressures outlast slower growth
The Monetary Policy Board has raised the cash rate target by 25 basis points since June.
Inflation peaked at 7.9 percent in late 2022, returned to the 2–3 percent range during 2024 and 2025, then accelerated to around 3.5–4 percent.
August forecasts put its return near the target midpoint in late 2027.
Bullock cited renewed Middle East energy pressures, AI-related costs, extreme weather, tight domestic capacity and weak productivity.
She said subdued demand growth remained necessary, with earlier rate increases still working through the economy.
Housing prices have fallen in most capitals but remain around 50 percent above early 2020; household borrowing risks remain contained.
Next week's Board meeting will assess whether tightening is sufficient.
Card fees meet broader scrutiny
Card surcharging ended on October 1 following the Payments System Board's review, alongside reforms to lower interchange fee caps and improve cost transparency.
Several large providers have reduced small-business processing fees.
A broader review follows amendments to the Payment Systems (Regulation) Act 1998.
It covers mobile wallets, three-party schemes, account-to-account payments and agentic commerce.
The RBA plans regulatory priorities by end-2026 and further consultation by mid-2027.
Its post-Acacia work includes consultation on settlement services for tokenised markets.
Designation is not intervention
The Cash Distribution Framework Act 2026 gives the RBA crisis-readiness and resolution powers to preserve critical cash services.
Linfox Armaguard Pty Ltd's designation enables action but does not mean intervention.
The Australian Competition and Consumer Commission oversees pricing, access and service standards.