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However, Phillips warns that inflation is expected to rise over the coming quarters, primarily because of base effects—comparing current figures to earlier quarters with very low inflation. Additionally, global factors, such as tariffs and trade tensions affecting the US economy, could push inflation upward internationally, influencing Australia's outlook.
The RBA's decision on whether to cut rates will involve careful assessment of both domestic conditions and international developments. While easing rates could support growth, rising global inflation could complicate the decision, prompting a cautious approach.