The minutes from the RBA’s latest meeting has revealed the central bank is leaning closer toward another rate hike.

Australians were just moments away from being handed another painful interest rate hike by the Reserve Bank of Australia during the meeting earlier this month, minutes have revealed.

The central bank published the minutes from the October 3 meeting, where the decision was ultimately made to keep interest rates steady for a fourth straight month.

Rates currently sit at 4.1 per cent, however some analysts fear this could change in coming months.

The RBA is expected to meet next week to decide if further rate rises are needed. Picture Gaye Gerard / NCA Newswire.

The RBA is expected to meet next week to decide if further rate rises are needed. Picture Gaye Gerard / NCA Newswire.

During the meeting, which was new governor Michele Bullock’s first as head of the central bank, the board expressed concern that inflation hadn’t been brought into line during their target time frame.

They blamed this partly on a huge jump in global oil prices caused by shrinking global supply, which is volatile and unaffected by RBA decision making.

“Members noted that inflation remained well above target and was expected to do so for some time,” the minutes read.

“Services price inflation remained sticky, and fuel prices were adding to headline inflation.”

A rising number of homeowners are under financial stress as higher interest payments force them to dip into their savings. One in 20 mortgaged families can’t pay for food and power, up from one in 100 in April last year. This is according to the Reserve
The board mulled whether to raise rates by 25 basis points or to keep rates steady, eventually opting for the latter.

“In light of these observations, members considered two options for monetary policy at this meeting: raising the cash rate target by a further 25 basis points; or holding the cash rate target steady.”

The Reserve Bank of Australia has kept interest rates on hold at 4.10 per cent in October. It marks the first interest rate decision under the stewardship of new Governor Michele Bullock. The interest rate hold is the fourth straight month of
Inflation is broadly following a downward trend after peaking in December last year, but the recent uptick in petrol prices is expected to “underpin inflation over coming months”.

The central bank’s next meeting will be on Melbourne Cup day in November, with economists split over whether the RBA will choose to keep rates the same or raise them higher.

Fresh inflation and unemployment data will have been released by the time of the next meeting, which will be able to inform the RBA’s decision.

Extracted in full from: Petrol price pain could force RBA’s hand in | Sky News Australia