Reserve Bank governor says there is ‘considerable uncertainty’ over Australia’s economic future and the board ‘remains vigilant’
Reserve Bank governor Michele Bullock said the central bank won’t hesitate to lift interest rates again to reduce “persistently high inflation” while acknowledging “I know this is not what people want to hear”.
“The board remains vigilant with respect to upside risks on inflation and will not hesitate to raise rates if it needs to,” Bullock said. “I know this is not what people want to hear.”Despite those comments, financial markets presently assess a 50:50 chance of a rate reduction when the RBA board next meets on 23-24 September, according to the ASX rate tracker. Investors put the chance of a December rate cut at more than 80%.
As for criticism increased public spending was fuelling inflation, he said two budget surpluses and cost-of-living measures had put downward pressure on prices. “In Armidale, average housing prices have risen by almost 40% since the beginning of the pandemic, while average advertised rents are up by almost 25%,” she said.
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