A Melbourne Cup day cash rate rise is on the cards after the RBA warned any unexpected strength in inflation may force it to act.
The RBA has so far been more willing than many of its international peers to tolerate a slower return to its inflation target, in the hope of retaining pandemic-era jobs gains and minimising the prospect of a sharp economic slowdown.
“Our view is that a rate rise in November would require an uncomfortably high CPI print, possibly combined with some sign of strength in the labour market,” Mr Boyton said. “Members noted that core services inflation remained persistent internationally,” the minutes said. “Domestically, the monthly CPI indicator suggested that progress in lowering services price inflation remained slow.”Adding to the prospect of a stronger-than-expected CPI print was the sharp increase in oil prices over the past few months, which has taken petrol prices above $2 per litre nationally.
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