With inflation surprising on the upside in Q3, we expect the RBA to lift rates by 25bp at its meeting next week. However, we suspect that the next rate hike will be the last one in the current cycle, given the Board’s reluctance to jeopardise pandemic-era employment gains. Moreover, as economic activity slows sharply and disinflation gathers pace, we still expect rate cuts as soon as Q2 2024.
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