MNI BRIEF: Australia Inflation to Peak Near 7% In Q4: Lowe

Headline Australian inflation will likely peak at just under 7% in the last quarter of this year before gradually falling back to the central bank’s target range of 2% to 3%, Reserve Bank of Australia Governor Philip Lowe said Tuesday.

Lowe, in a rare public interview with government owned broadcaster ABC, repeated his view that official rates, currently at 0.85%, would reach a high point of 2.5% over time and at a pace which would be “determined by events (MNI INSIGHT: RBA Now Data Driven As Guidance Suspended).

His forecasts are higher than those in the RBA’s May Statement on Monetary Policy, which forecast headline inflation – currently at 5.1% - would peak at 5.9% in December before falling back into the target range by June 2024.