Politicians across Australia should be hanging their heads in shame for undermining the interest rate cut hopes of battling homeowners. Rather than a near-certain cut in the Reserve Bank’s official cash rate later this year, economic tea leaf-readers are suddenly talking about a hike if inflation is not brought under control. Outside of a full-blown crisis, the RBA can only really wield the blunt stick of official interest rates.
Despite governments having the capacity to carefully manage spending and taxes, we have a generation of politicians who imagine it is OK to keep borrowing and spending big through economic booms and through dangerous inflationary signals. Journalism for the curious Australian across politics, business, culture and opinion. Federal and State politicians, including WA Treasurer Rita Saffioti, have continued to borrow and spend big despite evidence that Australia is developing chronic inflation.
The NSW Government last week became the latest to increase its borrowings, spend tens of billions of dollars on new transport infrastructure and offer more subsidies to cover household electricity bills. Nick Bruining Nick Bruining The NSW Budget was being absorbed at the same time money markets players were interpreting veiled warnings from RBA governor Michele Bullock. It was all enough to make these players suddenly price in a 20 per cent chance that the RBA would lift rates at its next meeting on August 6.
When asked whether the RBA board was concerned abo.