RBA Signals More Rate Hikes as Prices, Wages to Accelerate
- Sees inflation holding above top of 2-3% target through 2024
- Consumption growth set to slow sharply as rate rises take toll
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Australia’s central bank increased its forecasts for inflation and wages growth and highlighted the risk of a price-wage spiral emerging among key reasons it expects to raise interest rates further.
Headline inflation is now seen peaking at 8% this year, from 7.75% previously, the Reserve Bank said Friday in its quarterly Statement on Monetary Policy. Both the headline and core measures are predicted to remain above the RBA’s 2-3% target over the next two years. The RBA had, in August, predicted both measures would hit the top of its band in late 2024.