Swerv-o

For the financial eagles among you.

Story

Australian inflation has increased again. Given that the RBA is due to meet tomorrow morning, probably not a good indicator for interest rates remaining steady or decreasing.


S

asprilla

I reckon interest rates will go up by 0.5% this week.

renth

Wouldn't surprise me. It will cause a lot of pain to many though

Swerv-o

Yes, and according to the article, if inflation continues, then there may still be more to come.


S

renth

Good news if you've got saving though.

@boy

I doubt that. It will go up another .25% tomorrow - that's a given, but it will be the first back to back monthly increase in more than 4 years, so even though they would need to do a .5% tomorrow (and then some !) to start to harness inflation, it will be unpalatable for them to do so.

They will just wait a few months and pop it up again then :-)

stuckinblighty

What worried me about the thread title is the '6 year' bit.That isnt exactly a million years ago is it ?!? So historically what is the interest rate in Aus ? Does it float around all over the place or is it pretty steady with this just being a 'blip' ??

lee

@boy

no blip. Just a raging economy.
Attached is the cash rate graph since 1993...and also the home loan rate going all the way back to 1947

@boy

ahhh, but for every action there is an equal an opposite reaction....

Increasing cash rate results in strengthening Aussie dollar against US/Sterling, ,resulting in a further drop in what you get converting your euros/sterling when moving over here.

This trend will be with us for a while yet. Unfortunate timing for those making the move now. It certainly is a lot more challenging than it was 5 years ago.

What's life without a challenge though, right !

renth

"same shit shinier bucket" who cares if the kids are dressed in rags and it's beans for dinner again?

@boy

....The Kids do !

@boy

Yep - looks like thats what will happen based on the latest article this morning.
Raise it today and raise it again in May !

May rate rise likely after inflation hits six-year high
http://business.theage.com.au/may-ra...0303-1wkw.html

stariston

The Asian stocks have took a pounding of late and a lot of
Australian share owners have had a low 1 the banking sector
makes you wonder why the Rudd government are fighting inflation with
rate rises he just keeps putting them up and the inflation keeps getting stronger
while the rest of the world lower or hold to see whats next

but well after just over 100 days in office bet he know what he is doing

Swerv-o

Remember that it's the Reserve Bank that make the decisions on interest rates - they are independent from the government, and don't always act in the best interests of the government, as we saw during the election campaign.

Mr Rudd has very little to do with the decisions of the Reserve Bank.

What he does have control over, however is the millions of dollars of tax cuts he promised us during the election campaign. Given the figures released yesterday, he may do well to consider the governments position with them, or consider applying them in a way that doesn't generate immediate inflationary pressure, such as reducing tax on super funds or similar.


S

renth

Agreed 100%. I think that's what he'll do, he's a pretty shrewd operator, he'll fulfil his election promise but it won't be by handing out cash to all and sundry, John Howard style.

The $6000 credit for property investors charging 20% less than market rate on these new affordable homes he's just announced could be part of that.