The Reserve Bank of Australia (RBA) has lifted official interest rates for the second time this year as it struggles to bring inflation under control, saying inflation is “likely to remain above target for some time”.

But it was a split decision, with five members of the RBA board voting for a hike against four who preferred to hold steady.

With the lift in the cash rate target by 25 basis points to 4.1%, two of the three cuts made last year have now been reversed.

The board’s statement concluded that:

inflation is likely to remain above target for some time and the risks have tilted further to the upside, including to inflation expectations. It was therefore appropriate to increase the cash rate target.

inflation is likely to remain above target for some time and the risks have tilted further to the upside, including to inflation expectations. It was therefore appropriate to increase the cash rate target.

The RBA is in a difficult position, because the oil price shock following the breakout of war in Iran will push inflation higher, while also dampening economic growth. This combination of high inflation and a stagnant economy is termed “stagflation”.

Asked about the split vote, RBA Governor Michele Bullock told a news conference there had been a “very robust discussion” but the difference “was in the timing”. “The direction (of higher rates) wasn’t the issue,” she said.

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