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MNI BRIEF: RBA Rate Rise Dependent On 3% Wage Growth-Lowe

MNI (Sydney)
SYDNEY (MNI)

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.

MNI Sydney Bureau | +61-405-322-399 | lachlan.colquhoun.ext@marketnews.com
MNI Sydney Bureau | +61-405-322-399 | lachlan.colquhoun.ext@marketnews.com

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