QIC says RBA sees inflation risks skewed higher despite 4.35% hold
Reuters2026/08/14 04:52- QIC flagged unbalanced upside inflation risks in Australia despite a broadly balanced baseline outlook in the RBA’s August SOMP.
- RBA held the cash rate at 4.35%; Governor Michele Bullock signaled another hike remains possible.
- Central forecast assumes no further tightening; growth slows below trend through 2026; unemployment rises as policy restrains demand.
- Underlying inflation seen returning to the target midpoint only in 2028; weak productivity keeps supply constrained.
- Key risk: excess demand may be larger than estimated; capacity pressures could persist despite a sharper housing downturn.
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