Official cash rates rise above 4 per cent as RBA hikes June 2023
The Reserve Bank has lifted its official interest rate to 4.1 per cent, a level not seen since early 2012.
Reserve Bank governor Philip Lowe again sounded a warning about the rising cost of services, such as hospitality, which are labour intensive and vulnerable to rising wages.
“Recent data indicate that the upside risks to the inflation outlook have increased and the board has responded to this,” he noted in his post-meeting statement.
“While goods price inflation is slowing, services price inflation is still very high and is proving to be very persistent overseas. Unit labour costs are also rising briskly, with productivity growth remaining subdued.”
In particular, Mr Lowe drew attention to last week’s slightly bigger than expected rise in minimum and award wages, which was the highest in decades.
“Wages growth has picked up in response to the tight labour market and high inflation,” he observed.