RBA deputy governor hints at interest rate hike on Melbourne Cup Day | The Business | ABC NEWS
The RBA deputy governor says there are signs some people do not expect inflation to come back to the RBA’s target, which is “central banker’s nightmare”. Markets are putting the chance of a November rate hike at more than 50 per cent. The RBA’s rate-setting board will next meet at the beginning of November, with a decision handed down on Melbourne Cup Day. Andrew Hauser said, “we’re in a world of hard choices, that’s the reality here.” Speaking at Citi’s annual investment conference, he warned that the inflation outlook keeps getting worse. “There is an increasing share of businesses who are thinking that maybe 3 per cent, 3-and-a-half is the new normal,” he said.
The central bank is fighting inflation by raising interest rates. “Even though we are laying shorter term pain on top of pain, It’s to prevent a longer and potentially far worse pain down the track if inflation expectations get locked in”, Mr Hauser said.
Westpac chief economist Luci Ellis, who used to sit inside the RBA boardroom as an assistant governor, said “absolutely, they’re signalling that they’re considering a rate hike next month … We have for some time been expecting a rate hike in November, we think rate hikes beyond that are less likely but not impossible.”
While an estimated 2 per cent of mortgage borrowers are spending more than they’re earning, the situation is far worse for renters. “Fully 15 per cent of renters are in negative cashflow and higher inflation is a gut punch to them,” Mr Hauser said.
Mr Hauser also downplayed concerns about the state of the jobs markets after the unemployment rate rose to 4.7 per cent in September. “We need to see some easing in the economy, whether it goes to 5, whether it goes to some other number, that’s a debate we’re having in the context of our forecasts at the moment, and you’ll see our answers to that in a week or two,” he said.
#ABCBusiness
Subscribe: http://ab.co/1svxLVE
Read more here: https://www.abc.net.au/news/2026-10-21/reserve-bank-hauser-warns-inflation-outlook-materially-worse/107288574
Note: In most cases, our captions are auto-generated.
#ABCNEWS #ABCNEWSAustralia
