Free Trial

MNI BRIEF: RBA's Lowe Flags Wages Risk In Inflation Fight

MNI (PERTH)
(MNI) Perth

Returning inflation back to target required wages not accelerating much more, Reserve Bank of Australia Governor Philip Lowe said Monday, as he apologised to homeowners who took out loans believing rates would remain low until 2024.

Speaking before the Senate Economics Committee, Lowe was pressed on his views about the interplay between wages and inflation after last week being criticised for saying it was "best to avoid" rising wages to compensate for elevated inflation. Although welcoming nominal wage growth, Lowe said the return of inflation to target "will be smoother if growth in labour costs doesn't accelerate too much more," noting aggregate growth in labour costs was consistent with inflation returning to target.

Lowe also offered an apology to Australian's who took out a mortgage on the belief that rates would be kept at 0.1% until 2024. "I'm certainly sorry if people acted on what we’d said and now regret what they had done”.

Robert covers RBA and RBNZ policy and the economy for MNI in Australia.
True
Robert covers RBA and RBNZ policy and the economy for MNI in Australia.
True

To read the full story

Close

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.