The peak body for unions has made a drastic move to secure higher wages and prevent future interest rate rises, a top economist said.

The Australian Council of Trade Unions sparked alarm after pulling a survey of inflation expectations the Reserve Bank of Australia relies on for rate decisions.

It follows the central bank arguing that union long-term expectations of inflation were too high.

Inflation expectations can influence wage demands, which the major unions have massive sway over.

These wage increases can then pressure inflation and force the RBA to lift rates.

EQ Economics managing director Warren Hogan said the ACTU was “throwing the toys out of the pram” and creating a “blind spot” for the RBA.

“What the unions are trying to do is entirely in their own interests … and that is have high inflation expectations to support high-wage claims at the industrial level,” Mr Hogan told AM Agenda.

“But they don’t want to be seen as having those high inflation expectations as a reason for the RBA to put up interest rates.

“The one thing that this leadership of the ACTU has been is extremely aggressive in the way they’ve campaigned against rate hikes at any point in time.”

In the minutes of the RBA’s June meeting, the central bank noted union expectations were well outside the RBA’s 2-3 per cent band.

“Longer-term measures had remained consistent with achieving the inflation target, although unions’ long-term inflation expectations were an exception, having picked up sharply in May, as they had in 2022,” the minutes said.

The unions’ long-term expectations of inflation are up around 3.5 per cent.

This is also above forecasts of market economists who predict inflation will sit around 2.5 per cent in the long term.

An ACTU spokesperson said the council had scrapped the survey amid concerns it was not providing the RBA the best understanding of expectations.

“Unions negotiate wage outcomes for a very significant proportion of the workforce and many factors feed into wage claims as well as wage outcomes,” the spokesperson said.

“If the RBA is using this information in their decision-making, it is imperative a better methodology be developed and we are committed to working with the RBA to achieve this.”

Mr Hogan said the ACTU withholding inflation expectations came as real wages declined in recent years.

“It really just denies them information that will reveal itself when those wage negotiations are settled,” he said.

“This is all a much hotter space than it has been for decades because we’re seeing real wages go backwards because of this inflation that we can’t get rid of.

“And, of course, real wages are what motivates unions to take industrial action and make bigger wage claims.”

Recent figures from the Australian Bureau of Statistics revealed wages grew 3.2 per cent over the past year, but inflation outpaced this at 3.8 per cent.

Meanwhile, the RBA has lifted the cash rate three times since the beginning of 2026 and warned it may have to raise again while inflation remains elevated.

Read related topics:InflationInterest Rates