The strong rebound in economic activity has so far failed to ignite wages growth or inflation. That means that the Reserve Bank will refrain from raising rates.
The extraordinary vigour of Australia’s economic rebound is putting Reserve Bank boss Philip Lowe in a somewhat awkward position.
He’s being forced to justify why the central bank is keeping its official interest rate at a record low of 0.1 per cent – which is fuelling a surge in house prices across the country – when the broader economy is rapidly returning to ruddy health.
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Karen Maley writes on banking and finance, specialising in financial services, private equity and investment banking. Karen is based in Sydney. Connect with Karen on Twitter. Email Karen at karen.maley@afr.com
