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MNI INSIGHT: RBA Comfortable With Stronger Wages Growth

MNI (Sydney)
SYDNEY (MNI)

Wages are a main driver of RBA inflation views.

The Reserve Bank of Australia is comfortable with wages growth exceeding the rate of inflation and sees this as a return to normal conditions and unlikely to drive higher prices and create more pressure for interest rate hikes, MNI understands.

Australia is the midst of a hard fought election campaign and wage levels, which have consistently lagged inflation, are a key issue with the Labor opposition advocating a rise in the minimum wage to match CPI inflation, which is currently at a decade high of 5.1%.

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The Reserve Bank of Australia is comfortable with wages growth exceeding the rate of inflation and sees this as a return to normal conditions and unlikely to drive higher prices and create more pressure for interest rate hikes, MNI understands.

Australia is the midst of a hard fought election campaign and wage levels, which have consistently lagged inflation, are a key issue with the Labor opposition advocating a rise in the minimum wage to match CPI inflation, which is currently at a decade high of 5.1%.

Keep reading...Show less