Governor Michele Bullock said the Reserve Bank of Australia is assessing whether upside inflation risks are materialising as the Middle East conflict has kept oil prices elevated for longer than expected and excess demand persists. Speaking in Sydney before next week's policy meeting, Bullock said the RBA was not signalling a rate decision and that she could not speak for the nine-member board. Markets nevertheless price a 95% chance of a 25-basis-point increase to 4.60% on September 29. Bullock said inflation that reached almost 8% after the pandemic had imposed lasting cost-of-living pressure because lower inflation slows price increases rather than reversing them. She also said unemployment in a 4.5% to 5.0% range could ease labour-market pressure on inflation. The RBA has raised its cash rate by 75 basis points since February to 4.35%, while core inflation remains 3.6%, above its 2% to 3% target range. Bullock said weak productivity growth, geopolitical fragmentation, climate change, demographic change and the uncertain economic effects of artificial intelligence will shape Australia's longer-term outlook.