REPEAT: MNI: RBA Harper - Rates To Rise On Job Mkt Strength

Repeats Story Initially Transmitted at 02:45 GMT Feb 26/21:45 EST Feb 25

By Lachlan Colquhoun

     LONDON (MNI) - If Australia's labour market continues to strengthen, the

next move in interest rates will be up, a key member of the Reserve Bank of

Australia's policy setting committee told MNI Tuesday.

     "If the labour market remains strong, then the next move is up rather than

down, even though such a move may be some way off," said Ian Harper, a member of

the RBA Board.

     "In my opinion, there will be no case for the cash rate to lowered," if the

jobs market picks up further, he said.

     "So long as employment is rising, pressure will continue to build for

stronger wages growth," Harper added, emphasising that the labour markets remain

key for policy decisions.

--PERSONAL VIEW

     Harper, who is also the Dean of the Melbourne Business School, emphasized

that he was offering his personal views, and not those of the nine-strong RBA

committee which sets interest rates.

     The January unemployment rate was steady at a decade-low 5.0%, but momentum

was maintained with the creation of another 38,100 jobs. The RBA is forecasting

the rate to stay at 5.0% for 2019 before falling to 4.9% in 2020.

     Harper's views reflect those articulated by the RBA throughout much of

2018, when the outlook was for higher employment to flow through to wages

growth, pushing inflation higher into the 2% to 3% range, where an interest rate

rise could be considered.

     The RBA's latest Statement on Monetary policy outlined downgraded growth

forecasts, noting that the balance of probabilities between a rate cut or rise

had "shifted to more evenly balanced than previously."

     The RBA has kept official rates on hold at a record low 1.5% since November

2016.

--MNI Sydney Bureau; +61 405322399; email: lachlan.colquhoun.ext@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com