Australia’s central bank boss will be in the spotlight over the likelihood of future interest rate cuts as inflation continues to cool.
Reserve Bank Governor Michele Bullock on Monday will front a parliamentary grilling for the first time since the federal election in May and after the bank re-started cutting rates in February.
Questions about languishing productivity, jobs figures, falling inflation and planned changes to card payment surcharges are all on the table.
The cash rate is expected to be the hot topic as the RBA prepares to hand down another rates decision at the end of September.
Australia’s August unemployment figures, released on Thursday, showed it held steady at 4.2 per cent, though a surprise 5400 fall in jobs could bolster the case for more rate cuts.
Inflation data for August, which will be published on Wednesday, is also expected to show a small fall in underlying inflation.
The figure sits at 2.7 per cent – the upper end of the Reserve Bank’s target range – but a minor drop may not be enough to force the board’s hand in September.
As a result, markets have predicted the bank will not cut rates again until its November meeting.
Inflation isn’t the only economic concern plaguing the economy.
Though the Productivity Commission on Friday revealed productivity performance had improved in the June quarter, weak capital investment continues to hold back growth in living standards.
Reinvigorating sluggish productivity had been front of mind for the government since its re-election in May.
Treasurer Jim Chalmers in August convened an economic roundtable aimed at improving productivity, building resilience amid global uncertainty and making the budget more sustainable.
But many ideas pitched in the lead up to the event have not been implemented.
Ms Bullock is also expected to be asked about the RBA’s push to end changes to surcharges on bank payments.
The bank argues removing them would make card payments simpler, more transparent and help increase competition in the card payment system.
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