RBA governor warns at least two more interest rate rises needed to combat ‘scourge’ of inflation

Philip Lowe admits the magnitude of the pickup in inflation has come as a surprise to everyone'

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The Reserve Bank will need to lift the official interest rate at least twice more to ensure the scourge" of inflation is contained, with the pace and size of increases determined in part by how fast wages pick up, the bank's governor, Philip Lowe, has warned.

In a speech to the Anika Foundation on Thursday, Lowe admitted the pace of inflation had caught the RBA and other central banks flatfooted. He said they had no choice but to lift the cost of borrowing to stop an inflation psychology" from taking hold.

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