RBA more likely to hike than not

The case for the RBA to tighten policy is growing increasingly compelling. Underlying inflation is all but certain to overshoot its current forecast. Services inflation, which has long been a concern for the Bank, is also proving to be quite persistent. Meanwhile, the labour market has largely stopped loosening and green shoots are starting to emerge in the economy. As a result, we now expect the RBA to hike rates by another 25bp when it meets in two weeks' time.