Economists from Goldman Sachs, Deutsche Bank and Vanguard say the tight jobs market will prompt the Reserve Bank to lift interest rates at least two more times this year, taking the official cash rate to 4.6 per cent. The group has been the most hawkish among economists, but accurately predicted well before the consensus that the central bank would take the cash rate above 4 per cent. Alexis Grey, senior economist at global investment giant Vanguard, does not expect the RBA to raise the...

Finance Minister Katy Gallagher refused to back Treasury’s budget forecasts for full employment on Monday and sidestepped a growing debate over the definition, with unions and the Reserve Bank holding very different views. The issue will come to a head later this year when Treasurer Jim Chalmers and incoming RBA governor Michele Bullock strike a new agreement on the conduct of monetary policy, the first since 2016. Unions are pushing for Dr Chalmers and the RBA to adopt “zero involuntary...

Australia is entering a period of falling inflation after annual price rises peaked late last year, but that will not stop the Reserve Bank’s official interest rate hitting 3.6 per cent, the nation’s leading economists said, Despite talk of a potential rate pause, a snap poll of 24 economists by The Australian Financial Review on Friday showed 23 are tipping a ninth straight rate rise at the RBA’s first board meeting of 2023 on Tuesday. You have reached an article available exclusively to...

Deutsche Bank economists expect the Reserve Bank of Australia’s official cash rate to hit 4.1 per cent by August as it tries to curb inflation, which will make things difficult as Treasurer Jim Chalmers prepares his May budget. A cash rate at 4.1 per cent would push the economy into recession, some economists say, but Deutsche’s Philip O’Donaghoe said with inflation stronger than expected, the RBA needed to go harder. You have reached an article available exclusively to subscribers. New Year...

Annual inflation jumped to a near 33-year high 7.8 per cent in the December quarter, below the Reserve Bank’s 8 per cent forecast, but economists said underlying price momentum cemented more interest rate rises. Headline CPI was up 1.9 per cent over the quarter, driven largely by significant price rises in both domestic and international travel and accommodation, and a long-flagged increase in electricity bills. You have reached an article available exclusively to subscribers. New Year Sale....