The Economy, Stupid Interest rates set to rise: what does that mean for you?
Jan 29, 2026
Miriam Robin, AFR senior writer on corporate leadership and business behaviour, and David Bassanese, BetaShares chief economist and interest-rate specialist, discuss a surprise inflation jump and why the RBA may need to tighten. They explain trimmed-mean inflation, capacity constraints vs demand, services-led price pressures, likely timing of rate moves, market signaling and gold’s surge benefiting Australian miners.
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Labor Shortages Are Feeding Inflation
- Businesses report above-average capacity utilisation and widespread difficulty finding workers.
- Hiring pressures in low‑skilled sectors are pushing wages and potentially prices higher.
Lower NAIRU And Service Productivity Limits
- The RBA likely views the neutral unemployment rate around 4.5%, above the current ~4.1%.
- Low productivity in expanding service sectors means wages aren't translating to strong output growth, sustaining price pressures.
Plan For A Probable Single Hike In February
- Expect a live February RBA meeting and a likely single rate rise to reverse one cut.
- Prepare for hawkish commentary that could cool demand even without a long tightening cycle.