The risk of an economic downturn brought on by the conflict in the Middle East should not be enough to stop the Reserve Bank of Australia from raising interest rates on Tuesday as rising oil prices threaten to send inflation to fresh highs.
That’s the view of economists who argue the central bank’s ability to follow a “narrow path” that preserves the strong post-pandemic employment gains while bringing inflation back to its 2-3 per cent range is becoming more difficult.
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