by Dejan Pekic
Persistent Inflation May Point to More RBA Rate Rises
Posted by Dejan Pekic
An article in the Financial Review this week suggests the RBA has not done enough to curb inflation, with data estimating that Australia has the equal-highest core inflation rate among developed economies.
Research from Trading Economics puts Australia’s core inflation equal with the Netherlands, and when taking into account all advanced economies, second behind Iceland. Core inflation is measured differently across global economies, meaning the figures aren’t fully reliable, but it does reflect that inflation remains a key issue globally.
The Middle East conflict has played a role, with disruptions to shipping routes resulting in higher spends in sectors such as construction. Conversely, according to Treasurer Jim Chalmers, Australia currently has faster economic growth than all G7 countries aside from the US.
In deciding on cash rate moves, the RBA has a dual mandate to aim for both full employment and low inflation, a ‘narrow path’ approach that may be fuelling persistent price pressures. KPMG chief economist Brendan Rynne argues that the approach is no longer valid, and he predicts another rise at the next RBA meeting in August.
At Newealth, we stay on top of financial news to help you make informed financial planning decisions. If you’re concerned about how further rate increases will impact your portfolio, please contact us for a confidential call.
General Advice Warning:
The information in this blog is general in nature and does not take into account your personal objectives, financial situation or needs. You should consider whether the information is appropriate for you and seek professional advice before making any financial decisions.
Newealth Pty Ltd ABN 61 091 100 275 | AFSL 231297
Related Posts
A recent article on realestate.com.au* featured a young family who had made the major decision to permanently relocate to Italy with their children for a new home and debt-free living. Krysti-Glory Gallo, an interior designer, and Ricardo Parata, an educator, had plans to sell the family home on the Gold Coast and move to the
While the RBA held the cash rate at 4.35% in June, three successive rises earlier in the year – in tandem with major changes to CGT and negative gearing – continue to influence the property market. What you may be seeing are headlines around reducing borrowing power and falling property values. The situation is a little
According to JPMorgan’s ‘Annual equity returns and intra-year declines’ data released on 30 June, the average ASX 200 intra-year drop over the past 32 years was 13.8% (median 11.5%). While that might seem alarming, what is interesting is what happens afterwards. Despite that recurring mid-year drop, the ASX 200 has still finished the calendar year
