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Inflation will force RBA's hand ... but not today

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Australian Broker | 03 Jun 2014, 05:36 AM Agree 0
Rising inflation is likely to force the RBA's hand on rates, though it is unlikely to move today
  • Giles | 03 Jun 2014, 11:43 AM Agree 0
    Inflation - is a very broad gauge, and some analysis needs to go into what components of the overall inflation result are increasing before crowing about the need for rate rises. A break out of wages and incomes should maybe prompt a rise in rates, but our wage grow is at the lowest levels in many years. Unemployment is increasing. Under employment is rampant. Inflation caused by a lower AUD, increases in petrol prices, tax increases (cigarettes, bracket creep, stamp duties), utilities, food (ie our banana crisis, droughts or floods) should trigger cuts in rates or further risk economic growth. Reports from economists are interesting to consider, but its more of what they don't say or what barrow they are pushing that is of interest. There is a very vocal group wanting interest rates to start rising, as this is where they make their profits.
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