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Free AccessMNI BRIEF: RBA Rate Rise Dependent On 3% Wage Growth-Lowe
The Reserve Bank of Australia will require inflation to be "well within" its 2% to 3% target range and be confident it will not fall back before it considers raising interest rates, according to RBA Governor Philip Lowe.
In a speech Tuesday on "Recent Trends in inflation", Lowe said that wage growth – currently at an annualised 1.7% - would need to be growing at 3% and above for inflation to move sustainably into the RBA's target range.
Updated wages data for the third quarter will be released on Wednesday.
Lowe repeated the view that the bank's central scenario was for inflation to reach the middle of the target by the end of 2023, but this would not "warrant an increase in the cash rate." It was still plausible that the next rate increase would not be before 2024, and the latest data did not warrant an increase in 2022.
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.