TWO more rate rises have been predicted by Rabobank following the Reserve Bank Australia’s (RBA) failure to bring inflation to target within the time frame it set.

Rabobank expects the 0.25 per cent rises to take place in August and November, as economic conditions add to inflation pressure.

Variable rates of unemployment over February and March saw the unemployment rate rise to 3.8 per cent, which is under the RBA predicted 4 per cent – so the jobs market is tending to be more resilient than expected.

Inflation for the first quarter of 2024, was also not in line with the projected path and rose to 1 per cent from 0.6 per cent in the last quarter of 2023.

The RBA is expecting inflation to be at 3.3 per cent by end of June – it now appears that this is unlikely to be the case, and more restrictive monetary policy settings are likely to be put in place. This tends to be the same for other advanced economies.

The situation for the RBA is becoming much more difficult with wage increases, credit growth is accelerating, and business seems – for the most part – to be robust.

Unfortunately, this is mixed with weak productivity levels and increasing inflation in the United States.