An acceleration in services inflation and low unemployment are unlikely to force the RBA to raise interest rates on Tuesday, according to markets and economists.
An acceleration in services inflation and the lowest unemployment rate in almost 50 years are unlikely to force the Reserve Bank to raise interest rates on Tuesday and economists tip the cash rate to remain on hold amid signs households are cutting back.
The RBA, led by governor Philip Lowe, has become increasingly data-dependent as it nears the end of the most rapid tightening cycle in a generation, where it is trying to lift interest rates enough to engineer a return to its 2 to 3 per cent inflation target but without sparking a sharp increase in unemployment.from 7.8 per cent in the March quarter.
“Inflation comes from Canberra and the government must use the upcoming budget to take pressure off prices and the impact on Australian families and businesses,” Mr Taylor said.
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