This persistence in services price inflation reflects the strong demand for many services and strong growth in wages, against the background of weak productivity growth. One source of ongoing uncertainty is how quickly services price inflation globally will moderate and whether the needed moderation will require further increases in interest rates.
It is noteworthy that interest rates are higher in the other English-speaking advanced economies than in Australia and are expected to go a little higher still. The other significant source of uncertainty for the global economy is the strength of the economic recovery in China.