Simon Doyle, head of Schroders Australia, says the central bank will have to keep lifting rates to get inflation under control.
Simon Doyle, chief executive Australia of $1.4 trillion global fund manager Schroders, says at least two more interest rate rises and a jump in the unemployment rate are needed to get inflation in Australia under control.
“You could easily get another couple of rate hikes – another 50 basis points,” he added, citing a still low cash rate relative to history, resilience in advanced economies to higher borrowing costs, and stubbornly high inflation. “The population surge which is coming into the country is boosting domestic demand,” he said. “That is boosting inflationary pressures, particularly core inflation, and the RBA will have to react to it.“There’s a lot of uncertainty and markets probably have some positioning overhangs that the market is going to have to stomach,” Mr Sherwood added. “We still remain defensively positioned, and we’ll just watch it all unfold.
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