RBA Rate Decision in Focus: Why a February Hike Is Still Not a Lock

The surprise jump in inflation this week has pushed markets and many economists into near-consensus: the Reserve Bank of Australia is about to raise rates for the first time in more than two years.

Headline inflation is running at 3.4 per cent. Underlying inflation has ticked higher. Unemployment sits near historic lows at 4.1 per cent. Money markets are pricing a roughly 70 per cent chance of a hike at next week’s meeting.

And yet, beneath the surface, the case for an immediate move is far less clear-cut than the pricing suggests.

If governor Michele. . .