Stakes rise for RBA’s November policy decision

With inflation surprising on the upside and the labour market running out of spare capacity, the case for the RBA to tighten policy has never been more compelling. Although RBA Governor Michele Bullock continued to sit on the fence about the Bank’s next move, we think she will ultimately hand down a 25bp hike in November so as to preserve her inflation-fighting credentials. Elsewhere, we found out that Microsoft plans to significantly expand its cloud computing and AI infrastructure in Australia. That could well put the Australian economy in a better position to capitalise on the incipient AI revolution.