Some economists believe the result of tomorrow’s consumer price index is all the RBA will need to push the official cash rate to a fresh 12-year high.
The Reserve Bank faces its toughest decision in a generation that will force it to decide between its two core tenants - keeping inflation in check and ensuring all Australians have a job.
Financial markets put the chance of a rate rise at one-in-four while economists linked to the nation’s major banks believe the bank will look through even a slightly-higher-than expected inflation rate and hold rates steady, worried a further increase willThe bank board last met in mid-June, saying that recent economic data had been mixed which meant the bank remained “vigilant to upside risks to inflation”.
Another price pressure has been insurance, up 16.4 per cent in the year to March, the highest since the introduction of the GST.About the only good news may be around certain services with signs the surge in hairdressing costs - an issue that caught the attention of RBA governor Michele Bullock earlier this year - coming to an end.Credit:The bureau will also release the June monthly inflation figures which are likely to paint a different story.
In greater Brisbane, unemployment has increased 0.9 percentage points to 4.3 per cent while it’s also up in greater Perth to 3.9 per cent. ANZ senior Blair Chapman noted unemployment is usually driven by people finding work rather than outright job cuts.
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