HSBC: Australia's Central Bank Expected to Hike Rates in February Amid Tight Labor Market

Deep News01-22 13:00

HSBC Chief Economist Paul Bloxham stated that Australia's December employment data showed strong performance, significantly exceeding expectations. He noted that these signs of a tightening labor market are emerging at a time when inflation has already risen above the Reserve Bank of Australia's 2%-3% target band. Bloxham forecasts that the trimmed mean inflation for the fourth quarter will increase by 0.8% quarter-on-quarter, and on an annualized basis, it will remain above the central bank's target range. He remarked that the employment figures make it difficult to argue that the tightness in the labor market is easing. Bloxham now believes a rate hike in February is highly likely, but he warned that this would be painful for the country's economy.

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