Higher unemployment, Donald Trump’s tariff war and a slowdown in wages growth will drag on Australia’s economy and reduce shoppers’ appetite for spending, according to bleak predictions from a major global economics forecaster.

Oxford Economics expects the consumer-driven lift in economic growth that began mid-year will soon start to wane, with slow growth in NSW presenting the largest risk to the country’s nascent economic recovery. The completion of major transport projects in Victoria and NSW would also hamper growth, Oxford warned.

The predictions come just days before the release of inflation data that will form a central part of the Reserve Bank’s consideration of a possible rate cut next Tuesday. Financial markets put the chance of a rate cut at 69 per cent.

The OECD and Internat

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