The Reserve Bank of Australia has admitted it allowed unemployment to fall too low and that high labour costs are contributing to inflation pressures which forced it to U-turn and raise interest rates for the first time in two years last week.
In its fight against post-pandemic inflation, which peaked at almost 8 per cent in December 2022, the RBA raised interest rates more modestly than other central banks to preserve gains in the labour market and maintain “full employment” in Australia.
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