The Reserve Bank is likely to implement more cash rate rises, with Morgan Stanley analysts predicting it will hit 4.1 per cent.

The cash rate currently sits at 3.6 per cent.

This forecast follows yesterday’s stronger-than-expected employment figures, which held steady at 3.5 per cent – a near fifty-year low. Analysts forecast a rise to 3.6 per cent.

“The labour market is central to this assessment – the RBA flagged a desire for a soft landing to lock in some of the unemployment improvement post-Covid, but also acknowledged that some weakening is required to get inflation back to target,” Morgan Stanley’s note states.

“Near-term we think the bar for a quick shift back to hikes is high – accelerating core inflation (with the quarterly CPI data due to be release on April 26) is likely required to bring the May meeting back into play.

“Over the coming months though, a more resilient labour market is likely to skew the RBA towards acting on its tightening bias, particularly if it is paired (as we expect) with an accelerating wage growth path (with the June minimum wage announcement an important catalyst).”