© Reuters/DAVID GRAYFILE PHOTO: Pedestrians walk past workers sitting near a construction site eating their lunch in the central business district (CBD) of Sydney
SYDNEY (Reuters) - Australian wages grew at the slowest pace on record last quarter, data on Wednesday showed, pointing to the mountainous challenge policymakers face in boosting inflation to desired levels.
The official wage price index rose 0.6% in the three months to end December, the Australian Bureau of Statistics (ABS) reported, double what analysts had forecast.
Annual wage growth slowed to 1.4%, the weakest pace on record but better than forecasts for a 1.1% rise.
The stronger-than-expected outcome was influenced by businesses rolling back short-term wage reductions, returning salaries to pre-COVID levels, the ABS said.
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A phased implementation of the Fair Work Commission annual wage review also had a small positive impact, it added.
Still, the weak result suggested the Reserve Bank of Australia (RBA) will need to keep policy accommodative for a long time to come.
The RBA believes it will take a significant and sustained tightening in the labour market to lift wages and inflation to more comfortable levels, a tough task that could take years to achieve.
The RBA slashed interest rates three times last year to 0.1% and launched a massive quantitative easing programme to lower borrowing costs and boost inflation and economic growth.
(Reporting by Swati Pandey; Editing by Sam Holmes)