Odds of fifth interest rate hike this year shorten as RBA deputy warns inflation outlook ‘worsening’

Andrew Hauser says central bank faces hard choices' as it looks to balance risks of entrenched inflation with desire to protect labour market

• Get our breaking news email, free app or daily news podcast

The chance of a fifth interest rate hike on Melbourne Cup day has jumped after Andrew Hauser, the Reserve Bank's deputy governor, warned of hard choices" amid a materially worse" inflation outlook.

Hauser, speaking at an investment bank conference in Sydney on Wednesday morning, said the RBA monetary policy board members were juggling a slowing economy with fears that Australians were starting to lose faith in the central bank's ability to bring inflation back to the 2.5% target.