Elevated Business Profit Margins Could Worsen Inflation: Reserve Bank of Australia Governor Warns
The governor of the Reserve Bank of Australia (RBA) has warned local businesses not to drive up inflation by raising their margins too much.
During a parliamentary hearing on Sept. 16, which looked into the central bank’s recent interest rate decisions, RBA governor Philip Lowe said that increased profit margins could be a major contributor to inflation.
The governor then elaborated on the country’s inflation situation, which he said was driven by three factors: higher input prices, higher wages and higher profit margins.
“Today, (inflation) is largely from higher input costs,” he said.
“There’s some pickup in wages, but that’s not driving inflation. And I think in some industries, there has been an increase in margins.”…