The RBA expects inflation will remain stubbornly high in 2023 while the jobless rate will continue to fall from levels that are already at decade low levels.
, forecasting high prices throughout next year and an unemployment rate at or below 4 per cent until the end of 2024.
“The effect of high inflation and cost of living pressures on wage and price setting behaviour is a material risk to the inflation outlook,” The Reserve Bank said. That is the sharpest pace of increases in decades as it said the board was “committed to do what is necessary to ensure that inflation in Australia returns to the 2 to 3 per cent target range over time”.
It said more than 60 per cent of companies across a broad base of industries expected to lift wages by more than 3 per cent in the year ahead. “The lift in expected wages growth reflects firms responding to higher voluntary turnover and stronger inflation.”
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