Rise in inflation likely to be temporary: RBA chief
Governor of the Reserve Bank Dr Philip Lowe says Australia won’t be sucked into a “perfect storm” of the global inflationary whirlpool. That is to say, he doesn’t foresee a huge bump in the price of basic consumer goods like we’re witnessing overseas. In the US, an inflation rate of 6.2% – the highest it’s seen in 30 years – has been accompanied by a 5% rise in workers salaries. In contrast, inflation hit 3% in Oz in September and wages grew by less than 2% this year. In a big policy speech yesterday, Lowe said that the risk of this price “contagion” was overblown, in part because Australia’s JobKeeper program protected the local labour market from the shocks that hit international economies during the pandemic. Lowe also thinks the stress on global supply chains will be temporary. Inflation is on the RBA’s radar, but isn’t enough of a concern to warrant an interest rate rise next year, the central bank says.
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