RBA rate decision causing another blow to households

ABC NEWS (Australia)

In another blow to households, the reserve bank has lifted the official cash rate for the fifth time this year. A quarter of a percentage point rise puts the cash rate at four point eight five per cent. The highest in 18 years since the global financial crisis.   The move further adding to mortgage repayments and stretching already strained family budgets.

Transcript

00:03Melbourne Cup Day festivities

00:05Cheers!

00:06Dampened by an RBA rates decision that could stop the nation.

00:10A solemn looking governor acknowledged the hurt being inflicted on households.

00:15Some pain now will prevent even worse pain down the track.

00:18Inflation is too high and our forecasts suggest it will stay higher for longer.

00:23You've already raised interest rates four times this year.

00:26What makes you think this time it'll work?

00:28As you know, monetary policy does take time to flow through the economy

00:32and we think it can take 12 months or so.

00:36Households with a $750,000 mortgage would be slugged another $115 a month.

00:42Add in the other four hikes this year and that's $570 extra every month.

00:47I don't think it's the right decision at all.

00:50There has to be some other way.

00:51That's my message to the RBA. Just try something else.

00:53The Treasurer, under pressure, pointing overseas.

00:56The war in the Middle East is pushing up inflation and interest rates around the world

01:00and markets are expecting interest rate rises now in every major advanced economy.

01:05We've had five now this year. Most advanced countries have had one

01:09and it's because we have a persistent problem around government spending.

01:13The RBA now expects higher unemployment and it also doesn't see inflation returning to its target range until late next

01:20year.

01:21But some economists think we aren't headed for a recession.

01:24We've also got an AI and a renewable energy investment growth story which is actually buoying the economy.

01:32Plummeting house prices, rising unemployment and a sluggish economy.

01:37It's not a winning formula for a central bank trying to avoid recession.

01:40And with almost everything outside the RBA's control, perhaps the best it can hope for is a swift end to

01:46the Iran war

01:47and the energy crisis that's rattled the globe.

01:49Because, if necessary, it's not an Arabic.

01:50I'll say an Arabic let's say it's because of an Arabic Sửalaur of Southires.

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