Aussie Retailers' Price Cuts Show Slack Giving RBA Rate-Cut Room
- Real wages likely to decline in 2016, Hay Group survey shows
- Australia could join global struggle to lift inflation
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Australia’s biggest supermarket chain is slashing prices and steelworkers are accepting pay freezes in an economy with enough slack to allow the central bank to cut interest rates.
Traders are pricing in a 42 percent chance of a rate cut at Tuesday’s meeting, which helped drive down the local dollar by 1 percent last week. The Reserve Bank of Australia is struggling to spur growth -- even with a record-low rate of 2 percent -- as it grapples with unwinding mining investment and weakness in key trading partner China.