Updated · The Australian Financial Review · Aug 19
RBA Warns It Could Raise 4.35% Rate as Inflation Risks Threaten Wage Gains
Updated
Updated · The Australian Financial Review · Aug 19
RBA Warns It Could Raise 4.35% Rate as Inflation Risks Threaten Wage Gains
3 articles · Updated · The Australian Financial Review · Aug 19
Summary
Andrew Hauser said in Brisbane the RBA would not hesitate to lift rates from 4.35% if inflation risks materialise, sharpening its warning a day after holding policy steady.
Three risks drove the message: the war in Iran, heavy global investment in AI infrastructure and Australia's weak productivity growth, which Hauser said could keep price pressures elevated.
Australia's government acknowledged rising living costs are already eroding wage gains, underscoring the tension between slowing inflation and households still feeling squeezed.
The warning contrasts with the RBA's latest forecasts for wage growth to slow from 3.3% in 2026-27 to 2.9% by late 2028 as the labor market softens, leaving policy tilted between future cuts and renewed hikes.