High-than-expected inflation raises risk of another interest rate hike

ABC NEWS (Australia)

When inflation numbers come in higher than expected, it raises fears that interest rates might be lifted again. Despite wages and tax cuts putting more money in people’s pockets, the reserve bank has hosed down talk of more rises, for now.

Transcript

00:00The Reserve Bank wants to get inflation down, and it's been using the hammer.

00:08Monetary policy is a very blunt tool.

00:11But after new data this week showed inflation heading back up, despite 13 interest rate

00:15rises, concerns grew for people with mortgages that rates will lift again.

00:21The central bank wants the growth in prices to stabilise between 2 and 3% a year, but

00:27The Consumer Price Index and the RBA's preferred measure of trimmed mean inflation are still

00:32far above that, and trending up.

00:35Enter a deputy governor newly arrived from the Bank of England, telling Australians to

00:40keep calm and carry on.

00:43It would be a bad mistake to set policy on the basis of one number, and we don't intend

00:47to do that.

00:49The deputy governor says the RBA understands the impact on household budgets.

00:54We have a wide variety of ways of getting non-technical, spreadsheet-y, DSG model kind

01:01of information in to complement the pointy-headed stuff.

01:05Tax cuts from July 1st will put more money in people's pockets, but the Treasurer isn't

01:11worried.

01:12When it comes to energy bill relief and cheaper medicines and Commonwealth rent assistance,

01:17these are designed to put downward pressure, not upward pressure, on prices.

01:21The Treasurer also sure his scrutiny of the banks won't lessen competition, ANZ winning

01:26a long battle to buy Queensland's Suncor.

01:29Our competition watchdog opposed the $5 billion deal, but lost in court.

01:34We're always against the amalgamation, especially making the big four even bigger.

01:41There can't be any job losses or branch closures for three years.

01:46As the cost-of-living crisis continues, most economists are tipping a dip in rates until

01:51well into next year.

Category

Transcript

Be the first to comment

Recommended