Both today’s cash rate and its expected value over the next six months to 12 months form the anchor for the spectrum of interest rates in the economy. But there are other factors at work as well.
At the very least, nobody seems to want to go back to the very highly centralised industrial relations structures we had in the seventies and eighties. And the number of ‘days lost’ as the result of strikes is well down on what used to be regarded as normal. These things are all helping our growth performance.