Shadow RBA says no cuts for Christmas

The Australian National University's RBA Shadow Board says the official cash rate should remain unchanged with inflation still at 1.7 per cent. The Shadow Board's decision the cash rate should remain at the record low rate of 0.75 per cent equals 45 per cent. The confidence in a required rate cut is at 20 per cent, with 35 per cent certainty a rate hike is necessary. Shadow Board member Dr Timo Henckel said the rising unemployment rate and poor wage growth is a strong component for keeping the record-low rate. "The seasonally adjusted unemployment rate in Australia inched up to 5.3 per cent, coinciding with another small drop in the labour force participation rate to 66 per cent, the economy lost 19,000 jobs in total. "Nominal wages grew, year on-year, by 2.2 per cent, or, given the current inflation rate of 1.7 per cent, by 0.5 per cent in real terms. "Without a considerable pickup in wages growth to prop up consumption spending, and thus overall aggregate demand, economic activity is likely to stay muted, or slow further." Dr Henckel highlighted consumer confidence on a positive rise from 92.8 per cent in October to 97 per cent in November.