Explore the latest developments concerning Rates strategy shifts.
Rates strategy shifts as RBA poised to prioritise inflation over jobs
The Reserve Bank of Australia looks close to abandoning its goal of protecting employment gains while it addresses inflation as economy wide price pressures remain uncomfortably hot.
Economists say recent data – showing strong economic activity despite three interest rate rises this year, conflict in the Middle East and the impact of the government’s tax changes – had primed the central bank to tame rampant price increases by shifting its approach to focus more on the inflation component of their dual mandate.
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Major bank hikes rates in ‘clear sign’ of RBA’s next move
A major bank has lifted interest rates in a further sign that another hike by the Reserve Bank of Australia is highly anticipated.
ING said it would increase its fixed interest rates for owner-occupier and investor home loans by 0.2 per cent.
This will apply to all fixed rate loans that settle from today.
Richard Whitten, money and home loans expert at Finder, said it was a “clear sign” the bank expected the RBA board to raise the cash rate soon.
“Banks are experts at forecasting and setting interest rates in line with the market,” he told nine.com.au.
“They lower fixed rates when they anticipate interest rates to fall further, and lift them when they expect rates to rise.”
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Macca’s meals and Macbooks: How Australians are getting whacked by inflation
Australia’s inflation woes are spreading out from the fuel sector to everything from discount fast food meals to premium computers, keeping inflation higher as merchants begin to price in costs that they had once tried to absorb.
Over the past year, food and beverage prices rose 3.2 per cent, alcohol prices gained 4.5 per cent, and clothing and footwear increased 4.8 per cent on average, according to the Australian Bureau of Statistics.
“There are a bunch of businesses who haven’t shifted their prices or haven’t shifted them much because they keep hoping price shocks will be temporary,” said independent economist Chris Richardson. “But as this looks more and more like a forever war, businesses will build that into their pricing.”
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