Original article by Terry McCrann
Herald Sun – Page: 49 : 24-Nov-22

Reserve Bank of Australia governor Philip Lowe has stated that wage outcomes must be consistent with the return of inflation to the central bank’s target range of 2-3 per cent. Increasing wages in line with the inflation rate would inevitably result in large-scale job losses and further boost inflation. Allowing inflation to remain well above the target range for too long would also heighten the risk of a wage-price spiral. The Reserve Bank of New Zealand recognises these risks; its cash rate was increased by 75 basis points on Wednesday, and it seriously considered a one per cent increase. In contrast, the RBA increased the cash rate by just 25 basis points in November, despite the inflation rate in both countries being nearly identical. NZ’s cash rate is now 4.25 per cent, but Australia’s cash rate will still be just 3.1 per cent if – as expected – the RBA announces a 25 basis point increase in December.

CORPORATES
RESERVE BANK OF AUSTRALIA, RESERVE BANK OF NEW ZEALAND