Energy News

At its meeting today, the Board decided to increase the cash rate target by 25 basis points to 2.60 per cent. It also increased the interest rate on Exchange Settlement balances by 25 basis points to 2.50 per cent. The Board is committed to returning inflation to the 2–3 per cent range over time. Today’s increase in interest rates will help achieve this goal and further increases are likely to be required over the period ahead. The cash rate has been increased substantially in a short period of time. Reflecting this, the Board decided to increase the cash rate by 25 basis points this month as it assesses the outlook for inflation and economic growth in Australia. As is the case in most countries, inflation in Australia is too high. Global factors explain much of this high inflation, but strong domestic demand relative to the ability of the economy to meet that demand is also playing a role. A further increase in inflation is expected over the months ahead, before inflation then declines back towards the 2–3 per cent range. The expected moderation in inflation next year reflects the ongoing resolution of global supply-side problems, recent declines in some commodity prices and the impact of rising interest rates. Medium-term inflation expectations remain well anchored, and it is important that this remains the case. The Bank’s central forecast is for CPI inflation to be around 7¾ per cent over 2022, a little above 4 per cent over 2023 and around 3 per cent over 2024. The Australian economy is continuing to grow solidly and national income is being boosted by a record level of the terms of trade. The labour market is very tight and many firms are having difficulty hiring workers. The unemployment rate in August was 3.5 per cent, around the lowest rate in almost 50 years. Job vacancies and job ads are both at tweet at 11:30pm: RBA raises rate by 25 basis points, disappointing 50-bps expectations #AUDUSD sinks in response https://t.co/TkKVSFf2U6 tweet at 11:31pm: RBA: Rate Rise Will Help Achieve More Sustainable Balance of Demand and Supply - Board Is Committed to Returning Inflation to The 2–3 Per cent Range Over Time - Cash Rate Has Been Increased Substantially in a Short Period of Time. tweet at 11:31pm: RBA: Size and Timing of Future Rate Rises Will Be Determined by the Data and Outlook for Inflation and the Labour Market - Medium-Term Inflation Expectations Remain Well Anchored, and It Is Important That This Remains The Case tweet at 11:32pm: RBA: Given the Tight Labour Market and the Upstream Price Pressures, the Board Will Continue to Pay Close Attention to Both the Evolution of Labour Costs and the Price-Setting Behaviour of Firms in the Period Ahead.

tweet at 11:14am: ECB'S LAGARDE: INFLATION IS UNDESIRABLY HIGH tweet at 11:20am: MORE ECB'S LAGARDE: 'IT'S DIFFICULT TO SAY IF INFLATION IS AT ITS PEAK AND I AM NOT GOING TO VENTURE THERE' #eurozone #christinelagarde #monetarypolicy #inflation tweet at 11:20am: ECB'S LAGARDE SAYS MINIMUM THAT WE HAVE TO DO IS TO STOP STIMULATING DEMAND #News #Forex #LAGARDE #ECB