RBA makes eighth rate hike
The Reserve Bank of Australia (RBA) has increased rates by 25bps from 2.85% to 3%.
This was the eighth rate hike to have taken place in Australia this year as the central bank sought to control the cost of living.
RBA governor, Phil Lowe, said: “The Board expects to increase interest rates further over the period ahead, but it is not on a pre-set course. It is closely monitoring the global economy, household spending and wage and price-setting behaviour.
“The size and timing of future interest rate increases will continue to be determined by the incoming data and the Board’s assessment of the outlook for inflation and the labour market."
He also warned about inflation that could peak at 8% in the December quarter.
"A further increase in inflation is expected over the months ahead, with inflation forecast to peak at around 8% over the year to the December quarter. Inflation is then expected to decline next year due to the ongoing resolution of global supply-side problems, recent declines in some commodity prices and slower growth in demand. Medium-term inflation expectations remain well anchored, and it is important that this remains the case. The Bank’s central forecast is for CPI inflation to decline over the next couple of years to be a little above 3% over 2024."
Economists had forecast rates could keep rising until mid-2023.
AUTHOR
Laura Dew
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