Interest rates to keep rising as RBA warns it will do ‘what is necessary’ to curb inflation

RBA governor Philip Lowe says the bank will ‘step up to larger increases again’ to the cash rate to bring inflation back to the target rate. Photograph: Lukas Coch/AAP

Interest rates will be rising for the foreseeable future and the Reserve Bank of Australia will not hesitate in making higher increases than predicted if inflation does not begin to settle, the RBA governor, Philip Lowe, has warned.

Tuesday’s seventh interest rate hike saw the cash rate increase by the standard quarter of a percentage point, taking rates to a nine-year high of 2.85%, and Lowe said the RBA board would not hesitate to move to half percentage point increases if economic conditions didn’t improve.