RBA governor Philip Lowe’s “narrow path” to bring down inflation without the economy having to suffer too much pain is getting more challenging.
, which strips out volatile items such as fuel, printed at 6.9 per cent – a considerable 0.4 of a percentage point above its forecast.
“The market is pricing in the softest of soft landings, so all the good news is in the price of Aussie equities,” she says. Two-thousand-and twenty-three will be a major test for the RBA and Albanese government, as the full impact of last year’s eight consecutive rate rises – and counting – have their full impact on household mortgage repayments and consumer spending.
Australia does not have a wage-price spiral like the US, but the RBA is on high alert after a large minimum wage increase last year and as unions push for wages to keep pace with inflation.