Australia's Reserve Bank set to raise rates again on Tuesday
Summarised from 2 outlets · Updated 1 Nov, 01:20 · Archive
Australia's Reserve Bank is expected to raise interest rates for a second consecutive meeting on Tuesday, pushing the cash rate to its highest level since 2008.
Australia's Reserve Bank is widely expected to raise interest rates for a second straight time when it meets on Tuesday. The decision follows inflation data released the previous week that came in hotter than forecast, with the central bank's preferred measure of inflation—the quarterly trimmed mean—reaching one per cent in September against a forecast of 0.8 per cent. In annualised terms, the trimmed mean inflation stood at 3.7 per cent, marking the 20th consecutive quarter underlying inflation has exceeded the midpoint of the Reserve Bank's two to three per cent target band.
HSBC chief economist Paul Bloxham said the Reserve Bank is prioritising addressing inflation despite signs of a weakening jobs market and falling housing prices. "The RBA is prioritising the high inflation challenge and hiking in November," he said. Mr Bloxham estimated recession was a fifty-fifty prospect and predicted the unemployment rate would rise to 5.1 per cent.
A fifth rate rise this year would lift the cash rate to 4.85 per cent, the highest level since 2008. For a household with a $600,000 mortgage, this would mean an extra $456 in monthly interest repayments compared to the start of the year, according to financial comparison site Canstar.
How it is being reported
- Nation readies itself for rates that stop inflationThe Reserve Bank is widely tipped to lift interest rates for a second straight meeting on Melbourne Cup day, further hitting Australia's falling housing market.The West Australian · 1 Nov, 01:01
- Nation readies itself for rates that stop inflationThe Reserve Bank is widely tipped to lift interest rates for a second straight meeting on Melbourne Cup day, further hitting Australia's falling housing market.Perth Now · 1 Nov, 01:01
In this story: Reserve Bank of Australia · Michele Bullock · Paul Bloxham · HSBC · Australia
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