September hike firms as RBA inflation fears come true

Sharply increased oil prices due to the Iran war will add directly to inflation, the RBA head says. (George Chan/AAP PHOTOS)

Economists at one of Australia's big four banks expect the Reserve Bank to raise interest rates imminently after the central bank's governor issued a dire warning about inflation.

Michele Bullock told a parliamentary hearing in Canberra that it appeared that inflation was worse than the central bank had expected at its last meeting in August.