We’ve not seen interest rates this high since 2012, but the RBA has raised them once again this month by 0.25 of a percentage point, with official interest rates now at 4.1%. The bank’s board decided to lift the cash rate target for the second month in a row, amid concerns inflation is taking too long to come down.
Reserve Bank governor Philip Lowe again sounded a warning about the rising cost of services, such as hospitality, which are labour intensive and vulnerable to rising wages.
“Recent data indicate that the upside risks to the inflation outlook have increased and the board has responded to this,” he noted in his post-meeting statement.
“While goods price inflation is slowing, services price inflation is still very high and is proving to be very persistent overseas. Unit labour costs are also rising briskly, with productivity growth remaining subdued.”
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