Reserve Bank of Australia governor Michele Bullock has put the nation on notice that the central bank may need to raise interest rates next year for the first time in two years, marking the clearest shift in messaging following the recent inflation outbreak.

The RBA held the benchmark interest rate at 3.6 per cent at the final monetary policy board meeting of the year in a unanimous decision, but said the risk had flipped to more, not less, inflation and vowed to do whatever it took to reduce the threat of higher prices.