Odds of fifth interest rate hike this year likely to shorten as RBA deputy warns inflation outlook ‘worsening’

Andrew Hauser says central bank faces ‘hard choices’ as it looks to balance risks of entrenched inflation with desire to protect labour market

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Andrew Hauser, the Reserve Bank’s deputy governor, has reignited talk of a fifth interest rate hike on Melbourne Cup day, warning of “hard choices” ahead in response to an inflation outlook that “looks materially worse” than the central bank had expected two months ago.

Hauser, speaking at an investment bank conference in Sydney on Wednesday morning, said the RBA monetary policy board members were juggling a slowing economy with fears that Australians were starting to lose faith in the central bank’s ability to bring inflation back to the 2.5% target.