Australia: RBA expected to hike rates by 25 bps – UOB

Economist at UOB Group Lee Sue Ann expects the RBA to raise the OCR by 25 bps at its event on February 7.

Key Quotes

“Although we believe the end to the current tightening cycle is near, we have revised our forecasts slightly higher, now looking for the RBA to bring the cash rate to 3.85% before pausing as global growth slows and inflation softens.”

“There is some risk that the RBA takes a slower path if economic data continues to slow in early 2023. But we also bear in mind that the job market has been on a tear and this has driven the unemployment rate toward rock-bottom levels while job vacancies remain very high.”