UBS Australia chief economist George Tharenou said the labor market is cooling
but remains slightly tight; to slow inflation to the Reserve Bank of Australia’s
2.5% target, unemployment may need to rise from 4.6% in August to around 5%.
With upside inflation risks materialising, UBS still expects the Reserve Bank of
Australia to raise the cash rate by 25bps next week to 4.60%. Tharenou expects a
further hike in November once third‑quarter inflation is confirmed above the
Reserve Bank of Australia’s expectations.
