Bad news for millions of Aussies as Reserve Bank drops huge hint about inflation

The Reserve Bank has strongly hinted interest rates could rise again because inflation is taking longer than expected to ease.

The cash rate was last month left on hold at a 12-year high of 4.35 per cent but the minutes of that meeting warned inflation was still stubbornly high. 

'In finalising the board's statement, members agreed that it was important to convey that the information received since the previous meeting had reinforced the need to be vigilant to upside risks to inflation,' it said.

'The extent of uncertainty at present meant it was difficult either to rule in or rule out future changes in the cash rate target.'

The RBA's June 17 and 18 meeting was held before official data was released showing inflation in the year to May had surged by 4 per cent - putting it further above the Reserve Bank's 2 to 3 per cent target. 

The Reserve Bank's most recent forecasts have inflation falling to 2.8 per cent by December 2025.

But the minutes hinted inflation could take slightly longer to ease. 

'Members agreed that the collective data received since the May meeting had not been sufficient to change their assessment that inflation would return to target by 2026, despite some elevated upside risk around the forecast,' it said.