In the minutes of September meeting, RBA maintained easing bias with some dovishness between paragraphs. The minutes overall are inline with market expectations of further rate cut ahead, probably in October. It’s noted that “members would assess developments in both the international and domestic economies, including labour market conditions, and would ease monetary policy further if needed to support sustainable growth in the economy and the achievement of the inflation target over time.”
On international developments, RBA said “risks to the global growth outlook were to the downside”. US-China trade disputes had “escalated” while China’s growth “had continued to slow”. These developments were “affecting trade and investment decisions in overseas economies”. And, “against this backdrop and with ongoing low inflation, a number of central banks had reduced interest rates over recent months and further monetary easing was widely expected.”
Domestically, employment growth continued to be strong but “unemployment rate had remained steady at around 5.2 per cent”. Wages growth had “remained slow” with few indications of building pressures. Also, RBA repeated that the economy “could sustain lower rates of unemployment and underemployment.” Q2 Growth was expected to have been around 0.5%. “Private final demand, which includes consumption, business investment and dwelling investment, was expected to have been weak.”
BoE Carney might be asked to extend his term again in case of Brexit delay
According to a Financial Times report, in case of another Brexit delay, BoE Governor Mark Carney might be asked to extend his term once again, beyond the planned departure date of January 31. Ensuring smooth Brexit transition, in whatever form, is a top priority of the central bank. Additionally, UK might face another elections in the coming months. Any proposed successor for Carney could be easily rejected by the next government.
Carney, who took over the job from Mervyn King on July 1 on 2013, originally planned to serve a five-year term only. He had been asked to extend his term before by former Chancellor of Exchequer Philip Hammond.