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.”…