Lowe is, as he should be, very proud of how the bank’s interest rate settings have contributed to Australia recording the lowest unemployment rate since the early 1970s. By any measure, a jobless rate of 3.4 per cent is a tremendous outcome.Despite the crying from some sectors, there’s no way the Reserve Bank could hold interest rates at or around the 0.1 per cent they were in April. Rates had to climb, especially with inflation already out of the gates.
RBA governor Philip Lowe will parse key economic data all the way to February to determine the bank’s next rate move.Christmas sales data, job reports and, most importantly, the January 25 inflation report all take on super-sized importance for the RBA, which maintains it is not on a pre-set interest rate path.
Between March and September, as interest rates were pushed up by 2.25 percentage points, the number of people unable to keep up with repayments dropped. Separately, the number of people with high loan-to-value mortgages fell sharply.This sort of information does not suggest an economy about to fall over because of a cash rate that, in real terms, is deeply negative. It also suggests the RBA can probably lift interest rates further.
swrighteconomy Lowe is only responding to Labor's inept financial management!