Capital Economics: The Reserve Bank of Australia will continue to raise interest rates, as inflation concerns outweigh weaknesses in the job market.

Abhijit Surya, a macroeconomist at Capital Economics, said that the Reserve Bank of Australia decided to raise interest rates this week based on the view that the upward risks to inflation outweighed the downward risks to employment. He added that this situation may remain unchanged for some time. Surya said that due to the continuous surge in oil prices, Australia's inflation rate may rise to nearly 6% by mid-year. At the same time, real-time data shows that the job market is far from showing signs of weakness. He added that as a result, Capital Economics has revised its forecast for the peak of the official overnight cash rate from 4.35% to 4.60%.