Dow Jones Newswires: Australia’s central bank raises rates, says path to soft landing is narrow

by | Dec 5, 2022 | Stock Market

SYDNEY — The Reserve Bank of Australia continued to raise interest rates cautiously at its final board meeting for the year, maintaining the pace of increases despite early signs that inflation may be peaking. The RBA on Tuesday raised the official cash rate by 25 basis points to 3.10%. It was the third straight month that the RBA, which said it still expects to raise rates further, increased borrowing costs by that amount.

“Economic growth is expected to moderate over the year ahead as the global economy slows, the bounce-back in spending on services runs its course, and growth in household consumption slows due to tighter financial conditions,” RBA Gov. Philip Lowe said in a statement. “Given the importance of avoiding a prices-wages spiral, the board will continue to pay close attention to both the evolution of labor costs and the price-setting behavior of firms in the period ahead.” Some economists had said there was room for the RBA to pause after annual inflation moderated to 6.9% in October from 7.3% in September. Yet most had forecast that the bank would raise rates by 25 basis points, observing that quarterly inflation data will carry more weight and that the absence of a January board meeting woul …

Article Attribution | Read More at Article Source

Share This