Reserve Bank of Australia says Australia's inflation outlook has deteriorated markedly

Reserve Bank of Australia Deputy Governor Andrew Hauser said on Wednesday that Australia's inflation outlook has "deteriorated significantly," and that the upcoming third-quarter inflation data may confirm this assessment. The remarks were made ahead of the RBA's early-November policy meeting; bond traders had previously scaled back expectations of further rate hikes. Hauser warned that the RBA's communications with businesses show that many companies are passing on rising cost pressures, which could entrench higher inflation expectations. "The inflation outlook looks significantly worse than we expected in August... despite some cooling in the labor market, inflation has been running slightly above expectations," he said. He added: "What we have learned from our communications is that cost pressures are the primary consideration... a growing number of businesses believe that an inflation rate of 3.0% to 3.5% has become the new normal."