RBA Set for U-Turn to Rate Hike in Break From Global Trend

Australia’s central bank faces the uncomfortable prospect of going against the global grain and switching back to raising interest rates this week to douse resurgent inflation — less than six months after it last cut.

Economists expect the Reserve Bank will increase its cash rate on Tuesday by a quarter-percentage point to 3.85%, a view reinforced by overnight-indexed swaps. The turnaround has been driven by stubborn price pressures buttressed by a surprise drop in unemployment.