RBA officials have recently been downplaying the potential for further rate cuts. However, we believe their hawkish pivot won't last. Indeed, the surge in the jobless rate to a four-year high in September clearly signals that the labour market is in worse shape than the RBA had anticipated. With unit labour cost growth also softening, we think the Bank's concerns regarding the persistence of services inflation are likely overdone. All told, we still see a 25bp cut in November as more likely than not.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services