The RBA’s latest inflation and wage predictions help explain why Australia’s interest rate nightmare isn’t over

The main worry is workers might demand more pay, employers will pass that on to prices, and a wage-price spiral will take off

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Those hoping the Reserve Bank might cut Australian workers a bit of slack in its battle to curb inflation will be disappointed by the central bank’s latest economic report.

The release of the RBA’s quarterly statement on monetary policy on Friday does help us understand the thinking behind Tuesday’s decision to raise interest rates for a ninth meeting in a row and why further increases are likely in coming months.

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