RBA's Hauser Says Inflation Outlook Has Worsened Ahead of November Decision

Australia's inflation outlook has worsened despite signs that higher interest rates are cooling demand, Reserve Bank of Australia Deputy Governor Andrew Hauser said on Wednesday, according to Reuters.

Speaking at a Citi conference in Sydney, Hauser said the bank was still completing its quarterly forecasts. Higher oil prices were adding to inflation pressure, but he remained unsure whether another rate increase would be needed in November.

He pointed to an easing labour market and subdued consumption as evidence that tighter policy was taking effect. The labour market had softened more than expected, he said, alongside household demand and housing.

The cash rate stands at 4.60%. Minutes of the September meeting show the board unanimously raised it by 25 basis points, citing persistent price pressures and concern that demand was stronger than previously assessed.

The next decision is due on 3 November, with inflation data arriving beforehand. Hauser's comments leave the choice open: policymakers must weigh the risk of persistent inflation against the cost of further slowing employment. They are not a commitment to another increase.

Sources: Reuters report via MarketScreener; RBA September meeting minutes; RBA cash rate and calendar.

Archival photo: Reserve Bank of Australia, Sydney, 2008. Danausi / Wikimedia Commons, public domain. Cropped to 16:9 by Morval Universal.