MNI BRIEF: RBA's Hunter Sees Stronger Q3 Inflation

Reserve Bank of Australia Assistant Governor Sarah Hunter said third-quarter inflation is likely to come in stronger than anticipated in the August forecasts, while labour market and economic conditions appear tighter than expected.

Speaking at an industry conference, Hunter said the Bank is “actively analysing this question ahead of our next set of forecasts, which will be released in November.”

She noted that while employment growth has slowed slightly more than expected and global uncertainty remains high, “given these signs that private demand is recovering, and indications that inflation may be persistent in some areas, while labour market conditions have been stable, the Board decided that it was appropriate to maintain the cash rate at its current level at the September meeting.”

Hunter added the RBA will continue to monitor data and reassess its outlook, adjusting policy “as appropriate as new information comes to hand.”

MNI reported this week the RBA still sees the 3.6% cash rate as slightly restrictive. (See MNI POLICY: RBA Sees 3.6% As Still Likely Restrictive)