RBA Says No Near-Term Recession Risk Amid Rising Unemployment and Inflation
Australian inflation data showing headline CPI at 4. 3% and underlying price growth at 3. 6% prompted expectations of another Reserve Bank of Australia cash-rate rise, raising concerns that the country’s steepest housing-price slump since the late 1980s could deepen. Reserve Bank assistant governor Dr Sarah Hunter told 60 Minutes that rate hikes are the most effective tool to curb inflation despite the strain on mortgage borrowers, and noted that while government spending fuels price pressures, the central bank’s ability to control inflation is limited, so further hikes are expected.
Analysts weighed a possible fifth rate increase ahead of the September CPI release, with some forecasting the cash rate could rise to 4. 85%, while economists had earlier warned that trimmed-mean inflation could exceed the RBA’s forecasts, increasing the likelihood of a November hike. The September CPI increase was driven by higher housing and fuel costs, pushing headline inflation above expectations.
